Translated material
Obrok.Ru
Will Russia be able to surround the Network?
There is no consensus in the world yet on how to collect taxes from online commerce. But in Russia this problem is not yet seriously discussed at all. That does not prevent domestic tax authorities from undertaking experimental checks of the inhabitants of the virtual space.Solving the problem of collecting taxes online is likely to become much easier in the near future. In mid-January, the Financial Affairs Committee of the Organization for Economic Co-operation and Development (OECD) proposed adopting a single rule on a key issue for this problem: taxes should be taken only from the owner of the site and only in the country where he, the owner, is registered. If the governments of 30 OECD countries (the most developed countries in the world) support such a proposal, then the long-standing debate about where and from whom to collect taxes on the Internet will decline.
There are three main approaches to this issue. Thus, the US Internal Revenue Service believes that a website physically located in America is a “permanent establishment”, which means its owners must pay taxes in the United States. Even if the site is managed from another country and its owners have never been to the States. In the UK, they tried to introduce another option - to shift the responsibility for paying taxes to online buyers, of course, living in the UK. However, most European countries are inclined to the most realistic model - to collect taxes from the owners of online stores in those states where they are legally registered. And the OECD proposal is aimed precisely at making this approach universal.
Russia is not a member of the OECD, but domestic tax collectors seem to have nothing against the proposed rules and will most likely go in the same direction. Thus, the head of the department of methodology for profit taxation and accounting of the Ministry of Taxation, Karen Ohanyan, in a conversation with a Decent Money correspondent, expressed confidence that for tax purposes, a server cannot be considered a permanent establishment if only technical maintenance is carried out on Russian territory and there are no employees of the enterprise. According to Mr. Ohanyan, another US experience - special Internet taxes introduced in a number of American states - will not be implemented in Russia in the near future: “The volume of Internet commerce in Russia is still small. In addition, we have enough problems with tax regulation of offline trade. We should deal with them."
Sane Internet
The temptation to tax e-business is very great, but the consequences of such a decision have only just begun to be calculated. The conclusion of the Pacific Research Institute in California, which conducted one of the world's first studies of e-commerce, is clear: taxing Internet commerce is not cost-effective. According to experts, if a sales tax were introduced on all transactions made on the Internet, then in California alone by the beginning of 2002 more than 100 thousand jobs would be eliminated due to the decline in Internet commerce and a decrease in sales in general.
To doubts about the economic feasibility of “cyber taxes” we must add the objective barriers that any tax control on the Internet encounters. For example, the collection of customs duties and taxes of an export-import nature on the Internet is practically excluded, since goods cross state borders via telephone and dedicated lines, and services are provided by a company located on another continent. Given this, the World Trade Organization has proposed eliminating trade duties altogether where they cannot be regulated.
But not a single state has yet been able to voluntarily give up potential budget revenues. For example, Mr. Ohanyan expresses the idea of introducing a single tax on imputed income, similar to the one that is now imposed on small businesses in Russia. In this case, there will be no control over the actual income of Internet merchants at all. But firms will have to pay a predetermined tax, differentiated depending on the specifics of the product; it would be illogical to tax the sale of computer programs, music files, electronic equipment and food products at uniform rates.
Today, Russian tax services mostly only monitor tax evasion mechanisms using the Internet, believing that amending the legislation to close these loopholes is a matter of technology. However, the first few attempts to control the payment of taxes in the Russian part of the Network showed that this task is non-standard.
Banner hunting
At the end of last year, the Moscow Tax Ministry department requested information from the owners of online newspapers about advertising contracts and the funds spent on its placement. It is no coincidence that tax officials have focused on electronic advertising rather than e-commerce: electronic payment systems are not developed in Russia, and purchasing on the Internet, as a rule, is no different from the banal delivery of goods by courier or by mail with cash payment. Moscow lawyer Alexander Glushenkov, who was approached by the owners of online publications, notes: “Tax officials were misinformed regarding the amount of funds invested in advertising on the Internet . The volume of paid advertising does not deserve such close attention. In addition, most often the server places banners and links to its own resources - and this is not advertising at all. The tax authorities were satisfied with our explanations.”
However, entrepreneurs have counter questions that officials cannot yet answer. Thus, it is not clear how to take into account the amount of advertising on the Internet, as well as the costs of its placement. The number of banner impressions and Internet counter data give some idea of the real numbers, but cannot be evidence either for the tax inspectorate or for the court. And although, according to current legislation, any electronic data can be requested by a tax inspector in paper form, the question of how to technically do this in relation to online documents remains open: Russian tax laws do not regulate electronic business in any way. There is only a letter from the Ministry of Taxation “On the procedure for taxation of organizations that post periodicals on the Internet” dated May 11, 2000, according to which Internet media are actually equated to ordinary periodicals. They do not pay federal income tax and VAT if they are registered with the Ministry of Press and Information.
Although work is in full swing in the Duma on a dozen bills designed to regulate the Internet, legislators are avoiding the problem of Internet taxation. Laws are being prepared on electronic signatures, on transactions carried out using electronic means, on the provision of electronic financial services, and on electronic commerce. Mr. Glushenkov believes: “There is hardly a need for a law on electronic commerce; the existing civil legislation is quite sufficient, which must be amended as necessary. But laws on electronic signatures and electronic document management are simply necessary.”
Nevertheless, global experience has shown that it will still not be possible to equate electronic trade with conventional trade. This area requires specific regulation, including tax regulation. And an attempt to identify non-payment of taxes on advertising on the Internet is only the beginning of a long journey for Russian officials into the world of e-commerce.
In the meantime, there are still opportunities, having registered a server in Germany, to carry out business activities in Russia, and have an account for payment for goods and services in a third country. In this case, you don’t have to pay taxes at all.