Subject: OECD technical advisory group on e-commerce and professional data assesment

From: David Burdett <[email-masked]>
Date: Fri, 12 Mar 1999 18:57:45 -0000

At the end of last year, there was discussion on the Trade WG about how IOTP
could potentially be used to support the record keeping associated with the
collection of tax information.

Following on from this I've been invited to join the OECD technical advisory
group on e-commerce which will hold its inaugural meeting in Washington on
20-21 April.

If anyone has any comments, views, opinions, ideas, or anything else that
you want to make on or about this topic please send me an email or
preferably e-mail the list. 

In this way I hope to take the views of the Trade WG properly into account
during the meeting.

Regards

David
> Mondex International Limited
> mailto:<[email-masked]>
> US Advanced Technology Office: 111 Pine St, 6th Floor, San Francisco, CA
> 94111
> Tel/Voicemail: +1 415 645 6973	Fax: +1 415 956 9370
> 
-----------------------------------------------------------------------
Message addressed to: [email-masked]
Archive available at: http://www.elistx.com/archives/ietf-trade/
To (un)subscribe send a message with "subscribe" or "unsubscribe" in the
body to: [email-masked]

---

From: Neil McEvoy <[email-masked]>
Date: Mon, 15 Mar 1999 08:48:16 +0000

----------
>From: David Burdett <[email-masked]>

> preferably e-mail the list.

In the end, it will be impossible to collect taxes on bits, because they're
too easy to smuggle. Tell them to tax atoms instead, e.g land, buildings,
etc.

Cheers
Neil

----------------------------------------------------------------
Neil McEvoy, Director                                   Hyperion
                                         8 Frederick Sanger Road
http://www.hyperion.co.uk/                  Surrey Research Park
mailto:[email-masked]                 Guildford, Surrey, UK
Finger for PGP public key                 Tel:+44 (0)1483 301793
(new key Jan 98)                          Fax:+44 (0)1483 301793

Where people, networks and money come together..consult Hyperion

---

From: David Burdett <[email-masked]>
Date: Mon, 15 Mar 1999 16:06:26 -0000

I agree it's impossible to tax "bits" since you can't easily detect where
the bits are going to. However if your are buying something, whether it's
delivered digitally or physically, then you have to make a payment and this
where a "tax" could be levied.

All it would take is for tax authority who has some type of jurisdiction
over a merchant to pass a law that says "collect x% on all your sales over
the Internet and give them to me" and the merchant would *have* to collect
them if he wanted to stay in business.

If e-commerce keeps on growing in the way it seems to be, then I think it is
a real possibility that a tax authority, in some state or country, might
declare this type of unilateral tax collection because they are losing too
much tax revenue which they have to recover in some way (does anybody
disagree?).

It would be much better if there was a more reasoned, effective, fairer,
workable, low cost method of collecting taxes if they are to be imposed, and
this is what I think the OECD wants to help facilitate, at least on an
international level. I think two things need to be done to do this:
*	working out what taxes should apply and the rules to be used in
calculating them, and
*	making sure that, once you know what the rules are, you have a good
effective infrastructure in place to effectively record, collect and
transfer the revenue to the appropriate tax authority.

I really haven't a clue what the rules for calculating tax should be ...
I'll leave that to the tax experts. But I do think that protocols like IOTP
can help with the recording, collection and transfer of the taxes which, I
think, is the focus of the Technical Advisory Group.

David
> ----------
> From: 	Neil McEvoy[SMTP:[email-masked]]
> Sent: 	15 March 1999 00:48
> To: 	Ietf Trade WG
> Subject: 	Re: OECD technical advisory group on e-commerce and
> professional data assesment
> 
> 
> 
> ----------

---

From: Neil McEvoy <[email-masked]>
Date: Mon, 15 Mar 1999 17:02:11 +0000

> them if he wanted to stay in business.

...in that jurisdiction.

Tax competition drives business, especially "weightless" business which is
easy to re-locate, to low cost areas. The best example is the creation of
the multi-trillion eurodollar market in London following the imposition of a
withholding tax in the US. Now that cross-border financial transactions are
becoming available to the rest of us, I think we can expect at least a trend
for commerce servers to be located in low or no tax jurisdictions.

I sense we actually agree on most of these things if we steer clear of the
kind of absolutes in my last polemic! So, I would suggest a stance at the
OECD along the following lines:

- don't imagine a tax bonanza: attempts to raise these kind of taxes will be
self limiting

- please don't try to complicate enabling technologies like IOTP overly; it
will be an incentive to go offshore _and_ use a simpler protocol.

Regards
Neil

---

From: David Burdett <[email-masked]>
Date: Mon, 15 Mar 1999 20:06:29 -0000

Neil

I think I agree with you, especially the bit about companies re-locating to
low tax areas. I'm pretty sure that the people working at the OECD are aware
of this risk which is why they are trying to get a multi-national
co-ordinated approach which would stand a better chance of success. If the
OECD initiative doesn't succeed then I think the only other option when
businesses start relocating to different countries, is for tax authorities
to increase some other tax (income tax?) to compensate. Do we want that?

I also agree that we don't want to over-complicate IOTP. What I currently
envision, at the *most* is adding an additional optional element in the
Offer Response which would allow a merchant to state the taxes which were
being imposed and why. As it is optional I think it should mean backwards
compatibility with the current spec. I am currently strongly inclined to
resist aything much more, although it's not really a good idea to pre-judge
what the results of the TAG will be.

As far as using an alternative protocol, that's not the real issue. IOTP can
work in any country by anybody who wants to implement it. Just because IOTP
*could* allow tax information to be recorded, it doesn't mean that if you
use IOTP then you have to collect tax. So if you re-locate your business to
a low tax domain to avoid paying tax, then you could still use IOTP.

It's just that *if* tax IS going to be collected on the net, then wouldn't
it be better to have a common approach towards doing it?

David

> Sent: 	15 March 1999 09:02
> To: 	Ietf Trade WG