Does one single nation truly have the right to demand tax from a webpage that is at once viewable and dynamic all over the world?
Here in New Zealand, one can pick up, on shortwave, Radio Australia. If I hear a radio advertisement that convinces me to buy a product, does the New Zealand government have to the right to demand tax from Australia? Who would pay? The advertiser? The radio network? Or the manufacturer of the product I purchased?
It really gets sticky. Facebook is also free to the user. It does not charge for a subscription. Where it DOES makes its money is from clicks on targeted advertisements. A click could be worth anything from a cent to 10 cents, depending on what is trending.
This is what Inland Revenue New Zealand wants to tax. IRD argues that since those clicks are being conducted on PC's, tablets and smart phones in our country, by our people, it's entitled to a cut. But is it a cut they are truly entitled to? Hard to say.
Further Reading RNZ News