Prevent tax evasion,
Close interstate and inter-country loopholes,
Decrease tax competition,
Ease the tax compliance burden of remote sellers,
Protect remote sellers from double taxation, and
Protect local retailers from remote sellers who use the tax laws to gain an unfair competitive advantage.

The article reviews progress on meeting these goals, particularly noting the OECD's TAG (Technical Action Group) on the characterisation of income: countries with a net surplus on e-commerce trade prefer income to be taxable as trading profits because they tend not to have taxable permanent establishments in foreign countries, while countries with an e-commerce deficit prefer the income to be characterised as royalties, becuase they have withholding taxes on royalty payments.

Professor Hardesty notes the OECD campaign against 'offshore', concluding rather challengingly that: 'The OECD seems determined to make tax havens pariah states. It seems unlikely substantial enterprises will wish to do business there. The business of these remaining havens may be limited to criminals and those that are pathologically anti-tax.' Ask Bermuda what it thinks of this!

Finally, addressing the question of whether there will ever be a harmonised global tax system, David Hardesty thinks that firms selling into dozens of remote jurisdictions won't tolerate having to cope with multiple VAT regimes, and that a unified regime may develop:

'Some have suggested a single registration point for worldwide VAT collection. A company would register with one organization, which would collect the tax, and would remit the tax to various countries, based on the location of sales. Obviously, such a system would require a fair degree of consistency among the VAT systems of countries around the world. Does this not look like a one-world tax system?'

See the complete article at: http://ecommercetax.com/doc/112600a.htm