The benefits surrounding the idea of cloud computing and cloud communications often focus solely on the impact that can be made from the perspective of cost and efficiency. Businesses throughout the world are learning the impact deployments can make in these two areas, while also supporting mobility and other preferred strategies. One thing that may not be so clear is the tax liability.

To that end, Bloomberg (News - Alert) BNA recently posted a piece on the indirect tax perspective associated with cloud communications and cloud computing. In a lot of ways, cloud computing creates tax complexities as it has a borderless quality that makes it difficult for taxing jurisdictions and tax teams to proactively manage the associated risks. This is especially troubling given the rapid adoption and growth of this technology.

As companies focus on their core competencies and enjoy the benefits associated with cloud computing, governments throughout the world are actively investigating and writing tax laws that could increase the risk that taxpayers will get caught unaware. The biggest challenge here is that companies have taken advantage of cloud communications that allow them to communicate and even compete in other countries without paying the hefty costs that generally accompanied such activities. If that means lost tax revenue for that government, change is likely on the horizon.

Still, most governments are unclear how to treat cloud services from a tax perspective. Even as businesses supplying and receiving cloud services are growing rapidly and expanding globally, tax authorities are not keeping up, leaving money on the table. As new products and services continue to enter this space, the learning curve for the adoption of understanding among government entities so that tax law can be applied is delayed even further.

One thing is clear in cloud communications: local tax laws have not evolved to sufficiently keep pace with the necessary taxation of technology to reap the benefits. The laws that are in place actually predate much of the technology we today enjoy. As innovation continues to move at a rapid pace, it is unlikely that taxing parties will catch up in order to completely understand the technology and its place in the market so as to properly tax it.

This is not to suggest then that taxation cannot happen. On the contrary, taxing entities are more likely to develop guidelines that have less to do with the technology and more to do with the evolving opportunities that are easily tied to other elements of the economic model. While the process is still ongoing, it isn’t likely to stay quiet for long. For those not watching, the outcome could be painful.