The OECD Recommendations on Characterization of E-Commerce Revenue

ABC company located in the United States sells a book to Ronaldo Silva residing in Brazil. How should ABC report its revenue if the book is shipped, or if it is sent electronically? Generally, e-commerce transactions entail interplay of legal jurisdictions. The international community approach is a guide to the e-commerce participants. It is advisable for e-business to know the law of the forum jurisdiction selected and the international perspective as well. Since taxation is one of the most important issues of businesses, the Organization of Economic Cooperation and Development, as the leading entity in international taxation matters, has addressed the problem of characterization of e-commerce revenue. This summary addresses the Organization for Economic Cooperation and Development's (OECD)) recommendations for e-commerce taxation. The United States and most Latin American countries have adopted these recommendations.

The following questions have been addressed in this article:

What is the Organization for Economic Cooperation and Development standard to differentiate between royalties and income from sells?
What are the Organization for Economic Cooperation and Development recommendations to differentiate between know how transactions and services?
What are the Organization for Economic Cooperation and Development standards to differentiate between sell of goods and services provided over the Internet?
How does the OECD address the problem of characterizing revenue from e-transactions as service or lease?

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