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Borderline Case International Tax Policy, Corporate Research and Development, and Investment (1997) / Chapter Skim
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6 THE VIRTUAL GLOBAL ELECTRONIC ECONOMY
Pages 75-80

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From page 75...
... Before we can analyze the impact of U.S. tax policy on international investment, it is necessary to understand three major fundamental changes in the global business environment (1)
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From page 76...
... , information, and services can be accommodated within the tax compliance systems existing today. This requires great vigilance to prevent such tollbooth taxes as a recently discussed "bit tax" on the digital "bit" stream over computer telecom, cable, and satellite proposed by a member of the European Commission's High Level Expert Group on the Social and Societal Aspects of the Information Society (Soete, 1996~.
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From page 77...
... iA more problematic position is reflected in a discussion note submitted to the OECD Committee on Fiscal Affairs by representatives of the United States, Canada, and Australia in June 1996. It expressed concern about potential erosion of the tax base because of the increased international mobility of services and capital.
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From page 78...
... tax laws is urgently needed.2 The emergence of virtual corporations undertaking active business investment in newly technological nations linked by information technologies and conducting electronic commerce heightens this urgency. High-tax countries such as Germany, Italy, and Japan will by necessity have to deal with the "hollowing out" of their investment base as the decreasing emphasis on boundaries leads to offshore joint investments.
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From page 79...
... 1996. Selected Tax Policy Implications of Global Electronic Commerce.
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From page 80...
... tax on profits earned by its subsidiaries located outside the United States until these profits are repatriated. The second major principle, the foreign tax credit, grants U.S.
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Key Terms

  • tax policy
  • work forces
  • income tax
  • foreign tax
  • global electronic

  • tax credit
  • international tax
  • tax rate
  • global business
  • foreign income

  • developed nations
  • eastern europe
  • international investment
  • playing field
  • global companies

  • assembled work
  • corporate tax
  • tax rates
  • information networks
  • low labor

  • business investment
  • electronic commerce
  • active business
  • joint venture
  • united technologies

  • earned outside
  • technologies corporation
  • tax base
  • profits earned
  • venture alliances


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