Abstract E-commerce plays an increasingly important role in the modern corporate world. However, due to its novel nature, it is poorly compatible with the existing taxation laws and regulations. The following paper aims at exploring the available empirical literature in order to determine the most common challenges to e-commerce taxation across the world. The chosen research method is a systematic literature review. The findings indicate an apparent need for an updated taxation legislature that would recognize the unique properties of e-commerce, eliminate tax avoidance possibilities, and, in some cases, reduce inequality between businesses with different financial backgrounds Introduction In the recent years, e-commerce has grown enormously both in volume and profitability of operations. However, the taxation process is still riddled with inconsistencies that introduce unnecessary complexity into the system (Low, Kabasunakatuba, & Sharma, 2013). Besides, on some occasions, it opens up the possibility to avoid paying taxes through unfair practices (Kirti & Agrawal, 2014). The following paper aims at outlining the most apparent challenges to e-commerce taxation on an international scale by comparing the issues pertinent to different counties. The findings will be useful for determining the most relevant directions for the policymakers and possibly highlighting the areas overlooked by previous researchers. Literature Review The current size and scope of e-commerce have reached an unprecedented magnitude. The volume of operations conducted on the Internet allows for the speculations on the possibility of the inevitable decline of the brick-and-mortar stores (Gałuszka, 2013). At this point, the concerns with the taxation are evident. However, several problems were outlined during the early phase of e-commerce development. For instance, Nellen (2001) pointed out several policy issues that required resolution considering the existing laws and regulations in the United States. Specifically, the issues included the possibility and necessity to tax the services of providing internet access, the collection of sales and use tax from the vendors that were not bound to a specific territory (e.g. non-present), the possible damages to brick-and-mortar businesses resulting from the incomplete taxation of the e-commerce entities, and the criteria for subjecting businesses of different kinds to the telecommunications taxes (Nellen, 2001). The author also pointed out that several states collect tax on digitized products and that this could lead to a situation where the retailer would be unable to know whether the customer is subject to such tax or not (Nellen, 2001). While some of the issues were addressed over time, the majority of problems identified in the early phase of e-commerce development can be observed in the segment today. Most of them can be connected to the specific attributes of the phenomenon. The most significant of these attributes is the inherent virtual quality of the e-commerce process. In simplest terms, at least part of the transaction that occurs between a vendor and a customer is not present on the physical plane (Gałuszka, 2013). In other words, the involvement of the Internet effectively br