Internet L@w and Tax

Amsterdam 28 October 1997

Reviewed by
Ian Culpin
Martech International
iculpin@martech-intl.com

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This is a Conference Report published on 27 February 1998.

Citation: Culpin I, 'Internet L@w and Tax', Conference Report, 1998 (1) The Journal of Information, Law and Technology (JILT). <http://elj.warwick.ac.uk/jilt/confs/98_1tax/>. New citation as at 1/1/04: <http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/1998_1/culpin/>

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1. Introduction

I was slightly sceptical at the start of the conference having spent a couple of hours driving to Amsterdam from Brussels. I found the public car park mentioned on the map, was not only not public, but also a bitterly cold twenty minute walk from the conference hall which contrary to the conference blurb had abundant parking places in the surrounding streets. However the hall at the Centre for Tropical diseases was a delightful if rather under-populated environment.

Under populated would not be the way to describe the agenda. There was a ready flow of articulate and expert speakers on a whole range of topics from implications for the employer/employee relationship in the Internet environment, to domain name registration and event the potential role of the banking community as a tax gatherer.

2. Electronic Commerce

The general tone of the conference underlined a personal opinion that electronic commerce will provide abundant opportunities for lawyers, accountants and consultants for many years to come. The emerging Global Marketplace is full of loop-holes and anomalies that many administrations are wary of rushing in to legislate on as ill-conceived laws could be very bad for business. David Richardson an Assistant Director of the UK Inland Revenue counselled a prudent approach, as potential tax erosion seemed to be limited and that one should be careful not to kill the goose that lays the golden egg, or in this case has the potential to lay the golden egg. Gilbert Kortenaar, of KPMG Meijburg, considered the VAT implications in Europe and pointed out the perfectly legal loopholes in the implementation of VAT that could be of great benefit to the margins of companies. He generally suggested that VAT in its current form was unsuitable for electronic commerce especially in non-material products. He also briefly examined other potential tax regimes, a bit tax (too indiscriminate), a bank tax (financial intermediaries collecting a tax on turnover ), getting the ISPs to tax transactions, or a generalised expenditure tax. None of which offer an obviously acceptable solution.

There was some good news from Albert Tramposch of WIPO (World Intellectual Property Organisation), indicating that new mechanisms for resolving conflicts relating to domain name holders would even the playing field, and hopefully stop some of the bully boy tactics that have been seen relating to domain names.

As in many conferences on Electronic Commerce, there were an abundance of US speakers. Although many were working in Europe, the familiar plea to allow industry to self regulate was a strong theme in many of the presentations, surprisingly reminiscent of US policy. Whilst the good global corporate citizen is an attractive notion, Europeans may be forgiven if they question its credibility given US industry's track record on greenhouse gas emissions.

The overwhelming feeling was one of optimism, partly because progress is being made to resolve many of the tax and legal issues and partly because the issues would not necessarily be resolved quickly, leaving opportunities for all to benefit.

3. Conclusion

At the end of the day it was clear that many of the critical areas would only be finally resolved by concerted intergovernmental activity. It was a thought provoking day that raised many questions, gave some answers and deserved better attendance. Perhaps by next year it will be possible to give a broader European expression of the global issues.