[governance] France Proposes an Internet Tax

Tue Jan 22 19:18:45 EST 2013

Hi,

To refresh folks historical memories....in early e-commerce days the US, Europe and elsewhere put a moratorium on - sales taxes - on online transactions. The US also entered into many bilateral trade deals that either focused on or included an e-commerce section.

Later, as online biz grew, the argument for treating online transactions distinct from off-line faded; except for Amazon, which gamed US law for more than decade pretending that they could not tell who they were truly transacting with nor where they lived; so therefore they could not be expected to collect sales taxes.

Then when that argument broke down, they said they could not be expected to collect sales taxes where they had no employees; and would promptly fire people - some to be rehired by 'independent third parties' in any state that tried to force Amazon to collect sales taxes on transactions in that (US) state. That included all their California employees.

Finally, in 2012, I believe Amazon finally ended this charade; more or less. (To be fair, this whole 'nexus' issue ties back to Supreme Court cases from the 19th century and Sears Roebuck catalogs being delivered to folks in the middle of nowhere; where there was no 'state' agent on hand to collect the tax anyway.  We might reasonably  think of Amazon as this century's equivalent of that fat print catalog from the past; certainly the US Supreme Court has.

Anyway, yes I can assure you all that OECD has been discussing tax policy and international trade in services issues since the earliest ecommerce days; this next generation set of issues re serving ads on free services are somewhat distinct but governed by the same general provisions of WTO trade in services agreements when the firm does not have a 'nexus' in a particular country; and by domestic law and tax policy when it does.

Which still must conform to general WTO policies. OECD's most recent push has been to attempt to shut down various - tax and finance havens - which obviously have had only limited effect, but do explain why the Swiss bank secrecy laws finally changed/caved to rest of OECD pressure, about 4 years ago.

All of this however is generally not handled by the OECD's ICCP committee, but by a whole different set of discussions and players at OECD including as Nick noted, trade and finance ministry folks.

My own bit part in this was sending one of my internet- and finance-savvy students to OECD as an intern to help out their tax folks back in those early early days; I have not kept up on all the latest I confess.

Attaining global harmonization on treatment of online transactions,and cross-border trade in services, would perhaps be further along already if the WTO's Doha Round wasn't stuck in neutral for the past couple decades.

Meaning, Michael, should cs/igc wish to see or encourage further progress in harmonization of Internet taxation, we would necessarily ally with the businesses and governments pressing for further globalization of the world economy; to date unsuccessfully. Many emerging market and developing nations have resisted pressure to permit further liberalization of international trade in services. Just as many OECD member states have resisted dropping various protectionist measures for their agricultural sectors in particular.  Hence the stalemate from Doha to Seattle to South Africa to Vancouver if I recall the various failed WTO meeting locales correctly.

I confess I am enjoying imagining Michael as the surprise spokesperson for a revived Doha Round! ; )

(And Bill - did I misstate or miss anything significant here in my quickie summary?)

Lee

________________________________
From: governance-request at lists.igcaucus.org [governance-request at lists.igcaucus.org] on behalf of Dr. Alejandro Pisanty Baruch [apisan at unam.mx]
Sent: Tuesday, January 22, 2013 6:37 PM
To: governance at lists.igcaucus.org; michael gurstein; 'Nick Ashton-Hart'
Subject: RE: [governance] France Proposes an Internet Tax

Michael,

in the same "what if" vein... what if the clever boffins in the OECD have realized that there is nothing exceptional about money made over the Internet, and leave it to each country to continue to try to exact taxes from income, profits and rents, as the countries' laws, regional arrangements, multipartite and global treaties mandate and allow? Wouldn't they be even more keen in stopping gaps and diversion schemes than any participant in these discussions is? (you said they are clever, they are boffins, and they are in the OECD... the rest is my second guessing.)

They may also be truly concerned about maintaining the technical integrity and global seamlessness of the Internet. I know a few people who share all these characteristics. Anyone talking to them to find out directly?

Yours,

Alejandro Pisanty

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________________________________
Desde: governance-request at lists.igcaucus.org [governance-request at lists.igcaucus.org] en nombre de michael gurstein [gurstein at gmail.com]
Enviado el: martes, 22 de enero de 2013 16:38
Hasta: governance at lists.igcaucus.org; 'Nick Ashton-Hart'
Asunto: RE: [governance] France Proposes an Internet Tax

As an aside and addressed to no one in particular, it occurs to me that for those who are truly concerned about maintaining the technical integrity and global seamlessness of the Internet should be looking to find appropriate and globally equitable means for taxation of Internet related activities rather than presenting ideologically based anti-tax posturing.

France may or may not succeed with this particular initiative, but behind them are most of the other OECD countries and behind them is the rest of the world looking to get some fair share from rapidly escalating Internet based revenues.  Better to my mind to have a reasonable and technically compliant plan in place than to attempt to play catch up as every country thunders forward with its own national taxation scheme and chaos in some form ensues…

(Anyone want to bet that the clever boffins in the OECD aren't already working in this direction?

M

From: governance-request at lists.igcaucus.org [mailto:governance-request at lists.igcaucus.org] On Behalf Of Nick Ashton-Hart
Sent: Tuesday, January 22, 2013 2:17 PM
To: William Drake
Cc: governance at lists.igcaucus.org
Subject: Re: [governance] France Proposes an Internet Tax

We've found that there's a need for much more coordination and consultation between ministries responsible for ITU matters and trade ministries.
--
Regards,

Nick Ashton-Hart
Geneva Representative
Computer & Communications Industry Assocation (CCIA)
Tel: +41 (22) 534 99 45
Fax: : +41 (22) 594-85-44
Mobile: +41 79 595 5468
USA DID: +1 (202) 640-5430

Need to meet with me? Schedule the time that suits us both here: http://meetme.so/nashton

Sent from my one of my handheld thingies, please excuse linguistic mangling.

On 22 Jan 2013, at 21:22, William Drake <william.drake at uzh.ch<mailto:william.drake at uzh.ch>> wrote:

On Jan 22, 2013, at 9:18 PM, Nick Ashton-Hart <nashton at ccianet.org<mailto:nashton at ccianet.org>> wrote:

It would not be possible for a measure  to target foreign companies only - that would breach France's WTO obligations (and that of many other countries were they to try to do the same thing).

A small problem that seemed to receive zero discussion among the proponents in Dubai
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