Taxation of e-commerce in selected OECD countries and Turkey

The concept of trade has evolved in various ways over time. The effects of technology have positively influenced the understanding of trade. Initially, the cost of trade was directly felt on the goods. However, technology has also helped reduce the costs of trade. Trade conducted through electronic platforms facilitates easier market entry due to lower fixed costs. This situation further diversifies easily accessible products. Consequently, electronic commerce is increasingly preferred by internet users. The internet not only enables the exploration of products or services within a country but also provides access to goods and services from other countries around the world. Consequently, electronic commerce eliminates the geographical borders between countries. This situation raises questions such as who the taxpayer in e-commerce is and where the tax originates. The uncertainties in people's minds can lead to confusion about how e-commerce should be taxed by which country. In response to this situation, countries are not only addressing this issue in their domestic legislation but also engaging in necessary international efforts. The OECD has outlined principles that member countries should adhere to regarding the taxation of electronic commerce: efficiency, flexibility, certainty and simplicity, effectiveness, and fairness. Additionally, to prevent double taxation arising from international electronic commerce, it recommends taxation based on residence or source principles. Accordingly, OECD countries have regulated their own legislation concerning electronic commerce. Moreover, these countries generally aim for a consistent and equitable approach to taxation in electronic commerce. China, holding a significant position in the global market, is not in favor of taxing electronic commerce and instead allows freedom for e-commerce participants. In contrast, Turkey applies tax rates on electronic commerce that are twice as high as those in other countries. Drawing lessons from past regulations on the taxation of electronic commerce can lead to more effective and efficient practices, advancing e-commerce further. This approach allows electronic commerce taxpayers to conduct their operations in a more organized and systematic manner, while enabling governments to accurately and easily present data resulting from regulation. Therefore, efforts towards the taxation of electronic commerce should be forward-looking and based on robust frameworks to ensure sustainable regulation in the future. Keywords: Electronic commerce, Taxation, International electronic commerce