Drifting Away: International Tax Revenue Lost in the E-Commerce Cloud
Douglas S. Stransky wrote an article entitled "Drifting Away: International Tax Revenue Lost in the E-Commerce Cloud," published by International Tax Review on October 29, 2013. In the article, Mr. Stransky addresses the fundamental question in cross-border e-commerce transactions: Which countries are entitled to the tax revenue from cross-border transactions that occur in the cloud without any permanent physical presence on the ground? The article analyzes the various international tax issues, concluding that companies conducting international business in the cloud should keep in mind that countries are becoming increasingly more aggressive in trying to recapture lost tax revenue. Accordingly, companies should be alert to policy changes or risk finding themselves suddenly taxed in a country where they had not expected it.