Destination-Based Taxation

Destination-Based Taxation refers to a tax system where tax is applied based on the location where a product or service is consumed, rather than where it is produced or sold from. This approach means that businesses collect taxes based on the customer's location, promoting fairness and ensuring that tax revenue goes to the area providing services. For example, if you buy a product online, sales tax would be charged according to your address, not the seller’s. This system is particularly relevant in discussions about digital goods and services in a global economy.