Rethinking the Definition of E-Commerce for International Taxation

E-commerce has become a central driver of global economic transformation, yet tax systems continue to rely on legal categories developed for predigital commerce. Despite the growing importance of digitally facilitated trade, many jurisdictions lack a coherent statutory definition of e-commerce, creating interpretive gaps in the allocation of tax authority, compliance responsibilities and regulatory governance. This study examines these issues through a doctrinal and policy analysis of Malaysia as an analytically revealing case study. Rather than treating definitional issues as merely technical, this study argues that legal definitions function as instruments of tax governance, shaping how digital markets are regulated across income and consumption tax regimes. Drawing on principles of tax neutrality, fairness and legal certainty, together with the OECD’s Ottawa Taxation Framework Conditions, the analysis illustrates how the design of legal definitions shapes administrative practice and the perceived legitimacy of regulatory outcomes. This study contributes to international taxation scholarship by proposing a more functional understanding of e-commerce capable of supporting coherent tax governance in the digital economy.