December 29, 2000, 12:08 PM — TOKYO -- THE Organization for Economic Cooperation and Development (OECD) is likely to approve a tax on cross-border Internet-based music and software sales when it meets in June 2001, according to a report from Japan's Kyodo News Service.
Quoting OECD sources in Tokyo, the news agency said the tax is likely to be approved when the OECD's taxation committee meets in June and is expected to come into effect in 2002 or 2003.
The tax has been under consideration by the OECD since 1998, when it published a report on the issue of Internet taxation. At present cross-border e-commerce is currently free of duties while sales of boxed software and music is usually taxed by customs authorities when it enters the purchasers' country. In its report, the OECD recognized the need to impose a tax on international e-commerce to preserve this important source of income for governments.
At their meeting in Japan in July, finance ministers from the world's seven largest economies agreed on the need to devise a tax for international e-commerce and said any such tax must not present an unnecessary burden that may inhibit the spread of electronic commerce or information technology.