How can governments reduce the prevalence of cross-border tax fraud? This paper argues that the use of digital technologies offers an opportunity to reduce fraud and increase government revenue. Using data on intra-EU and world trade transactions, we present evidence that (i) cross-border trade...

Despite its advantages, the borderless nature of electronic commerce poses serious challenges to governments worldwide regarding taxation. Where the goods or services are deliverable digitally (such as software or music) it is difficult to trace their origin for the purpose of taxation. Attempts...