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Consumption Tax Collection on Cross-Border Online Sales

Advances in Taxation

ISBN: 978-1-80043-327-4, eISBN: 978-1-80043-326-7

Publication date: 9 December 2020


Consumption taxes are an integral part of government revenue in countries around the world and are often subject to consumer evasion. The rapid rise of electronic commerce has exacerbated this problem as cross-border selling over the internet has enabled foreign businesses to sell and avoid collection and remittance of tax on their sales.

In this paper, we search for the solution to this problem through the analysis of three tax collection models: vendor, financial institution, and internet service provider (ISP). In addition, we examine administrative tools that enable more effective collection as well as inducements for taxpayers or collection agents to carry out their responsibility.

We conclude that the ISP collection model is not feasible at this time. On the other hand, we find that the vendor model, when supplemented with appropriate administrative tools and inducements, and the financial institution model, both represent viable options for policymakers to consider.



Lee, J. and Nikitkov, A. (2020), "Consumption Tax Collection on Cross-Border Online Sales", Hasseldine, J. (Ed.) Advances in Taxation (Advances in Taxation, Vol. 28), Emerald Publishing Limited, Bingley, pp. 187-214.



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