Global Taxation of Cross Border E-Commerce Income

56 Pages Posted: 26 Jul 2012 Last revised: 4 Dec 2017

See all articles by Rifat Azam

Rifat Azam

Harry Radzyner School of Law, Interdisciplinary Center Herzliya

Date Written: July 25, 2012


Amazon sells tangibles, intangibles and services worldwide that totaled $34 Billion USD in 2010. At more than 97 million active users globally meet to sell and buy online in total amount of $62 Billion USD in 2010. Global clicks at contributed substantially to its $10.5 Billion USD revenues in Q4 2011. In the year 2010 Americans spent around $173 billion USD shopping online. Global e-commerce turnover is expected to grow up to $963 Billion USD in 2013. These figures illustrate the importance of e-commerce in the global economy today and tomorrow. The taxation of e-commerce as well is very much important and difficult issue.

This article examines the taxation challenges of e-commerce and discusses the current responses at the academic level, national level and international level. This discussion concludes that the right answer to the challenges was not given so far and the need for a different response is essential in the age of e-commerce.

The article argues for the imposition of a global e-commerce tax on cross border e-commerce income and designs the details of the tax. Institutionally, this tax shall be levied and administered by a supra-national institution called the Global Tax Fund and the article sets a framework of the design of this new institution to be established by the countries in new international tax treaty. The proposal adds that the global e-commerce tax revenues shall be spent on funding global public goods, such as climate stability, and global communication infrastructures and so on.

A substantial normative work is done in the article to convince that the proposed tax is a good tax from tax policy point of view. The article makes the arguments that the global e-commerce tax to fund global public goods is legitimate, certain, efficient, fair and contributes to the finance of a genuine global need, ultimately concluding that the global e-commerce tax would be a desirable and plausible resolution of linked problems on both the income and the expenditure side of government functions.

Furthermore, the article responds to expected objections to the article's novel idea. It argues that supra-national taxation does not infringe tax theory. To the contrary, it goes hand by hand with the theory in the global era. As to state sovereignty objections, the article argues that sovereignty has changed and supranational regimes serve the new sovereignty.

This innovative article concludes by calling for thinking in open minds.

Keywords: taxation, e-commerce, globalization, global tax, global public goods, finance

Suggested Citation

Azam, Rifat, Global Taxation of Cross Border E-Commerce Income (July 25, 2012). Virginia Tax Review, Vol. 31, No. 4, 2012, Available at SSRN:

Rifat Azam (Contact Author)

Harry Radzyner School of Law, Interdisciplinary Center Herzliya ( email )

P.O. Box 167
Herzliya, 46150
972-9-9527948 (Phone)


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