Re: [tlug] Japan to Tax E-Content

[Edmund Edgar <lists@example.com>]

This seems like the right policy to me. Is anyone prepared to defend one of the alternative solutions?

1) If you want to operate a business selling downloadable content to consumers in Country X, you have to move your company to Country Y or you won't be able to compete with people you do. Conversely, companies selling to consumers in Country Y will have to move to Country X.

2) No sales tax is charged on downloaded stuff, but you have to pay tax on exactly the same thing if it's printed on paper or burned onto a CD. The result is that other taxes like income tax go up instead, that are much bigger destroyers of wealth than consumption tax, which is a wonderful, efficient way of raising revenue beloved by tax connoisseurs everywhere.

As far as enforcement goes you'll have to be doing quite a lot of Japanese sales to be due for this in the first place so the small vendors won't matter, and the big vendors like Amazon will tend to have operations in Japan and relationships with Japanese financial institutions that they use to take the payments. There may be a middle layer in between that's hard to collect, but some money is better than no money.

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Edmund Edgar
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