engleski

E-Business and Taxes

The development of information and communication technology has enabled significant changes in the ways of doing business. The Internet was created by mutually connecting various computer systems and independent network groups. The Internet can be defined as an all-present network of computer systems that are mutually connected by telecommunication links. It consists of a constantly increasing number of organizations and individuals who have made their information available to the wide, global market. Computers who are connected onto the network can communicate with each other. The possibility of transferring information, services and goods through the Internet all over the world, offering and transferring money creates new markets and business activities in which national borders no longer play any part. The development of the Internet and of electronic communication has enabled the emergence of a new form of electronic business operations where trade is performed without direct contact between the buyer and the seller. This has led to the increasing intensity of commercial exchange of both material as well as immaterial products, and it is taking a bigger and bigger share of the overall trade. The appearance of the Internet has enabled the creation of a completely new market which is overstepping the earlier determined limits of business transactions. Thus we can distinguish three basic functions of the Internet: 1) Communicational one (e-mail), which makes possible the transmission of messages and data by using the computer and telephone connection ; 2) Information platform which enables sorting, looking through and constant circulating of an immeasurable number of information ; and 3) Marketing one which gives an unlimited and relatively cheap possibility of global promotion of products and services. Economically speaking, the marketing function of the Internet is the most interesting one. The participants on the Internet can be viewed as a two-sided image in a mirror: on the one side we have those who offer the services (enterprises which deal with catalogue sales, software sellers, information services etc.), and on the other side we have those who look for (users) those services. The importance of the Internet is reflected in the fact that its size and sudden growth of activities differs essentially from already noted developments on the market. Besides that, business transactions over the Internet differ from the traditional business transactions on the market in the fact that the Internet lacks the characteristic of physical palpability. Although the Internet serves for the transactions of traditional material goods, the emphasis of e-commerce is on the transactions of immaterial goods which are delivered in digital form. The quantity and the value of such digital deliveries over the Internet is rapidly growing – we are talking about downloading or directly using music, video images, various available data, books and other information, and in the future we expect an increasing usage of software. The view on such modern way of doing business also sheds new light on the consideration of the ways of taxation of such business activities. The existing tax regulations are based on (historical) principles of taxation which were created more than 100 years ago, and thus are unable to respond adequately to the taxation challenges of e-commerce. It must be added here that the existing principled taxation attitudes are not applied only to one tax form, but have to be in several ways applicable to different tax forms, which is, considering the specificity of e-commerce almost impossible. Because of that, the necessity of completing and considerably altering the contemporary tax systems becomes absolutely imperative.

E-business; taxation; information and communication technology; income tax; value added tax

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