Source-Based Taxation of E-Commerce Income : A Study of the Unresolved Issues

Rapid progressions in cross-border e-commerce has revolutionized international trade and made it possible for businesses to transact in a borderless Internet environment. However, most international tax treaties still apply source-based taxation principles, including the permanent establishment concept, in taxing income derived from international commerce. This article examines whether source-based taxation remains theoretically valid in the territorial taxation of cross-border e-commerce income. It analyses the application of the permanent establishment concept to e-commerce corporate income and reviews some of the existing challenges and the current responses to these challenges at the academic and international level