Member states of the Organization for Economic Cooperation and Development are likely to impose a value-added tax on software distributors when they import music and images through the Internet, OECD sources in Tokyo said Saturday.
While imported compact discs are taxed at customs, online distribution has been spared as it is difficult to track and tax.
The sources said the tax will be approved at an OECD taxation committee meeting in June.
Taxation on Internet distribution, one of the main agenda items at the summit meeting of the Group of Eight industrialized nations in Okinawa in July, is likely to be realized in 2002 or 2003.
OECD members have voiced concern that the basis for value-added taxes, the main source of tax revenue, would be damaged if Internet distribution remains tax free.
Under the proposed system, tax authorities will force foreign distributors to register so they can track and tax online transactions.
In the future, credit agencies will add taxes to software prices to enable taxes to be paid to governments in buyers' countries.
While the United States opposed taxing Internet purchases on the grounds it would damage its superiority in information technology, the OECD began considering how to levy the tax in October 1998.