Indirect taxation of digital services after BEPS : a multilateral instrument to achieve harmonization and effective enforcement

Resource Information

The work Indirect taxation of digital services after BEPS : a multilateral instrument to achieve harmonization and effective enforcement represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Indirect taxation of digital services after BEPS : a multilateral instrument to achieve harmonization and effective enforcement

Creator

• Vázquez, J.M

Subject

• DST
• GST
• MLI
• VAT
• BEPS Project (OECD)
• enforcement
• harmonization of tax
• indirect tax
• digital economy

Language

eng

Summary

This article provides an analysis of new laws in order to come up with the most "appropriate" set of VAT rules to address the first of the problems identified in OECD's base erosion and profit shifting (BEPS) Project, which refers to the taxation of digital services (DS). To do so, it uses the Ottawa Principles of Taxation as a theoretical framework to evaluate if the specific rules adopted by countries achieve neutrality, efficiency, certainty, simplicity, effectiveness, fairness and flexibility. This theoretical framework allows to conclude that there are still two recurring problems that remain unsolved in this area after almost two years since BEPS' final report was published. The first problem is that the new VAT rules recently implemented to tax the DS differ significantly among jurisdictions. This lack of harmonization produces a great deal of complexity, uncertainty and heavy compliance burdens to businesses involved in cross-border transactions. As demonstrated along this article, none of the set of rules adopted by the different jurisdictions can serve as the "perfect model" to follow, and every single one of them has both positive and negative features. The second recurring problem it identifies in this field is that countries have not found yet a practical mechanism to ensure an effective enforcement of these new rules. This is extremely relevant since, without such mechanism, it is unlikely that VAT would be paid and thus, these new rules will become futile

Citation source

In: International tax journal. - Riverwoods. - Vol. 43 (2017), no. 5 (September-October) ; p. 19-34, 71

Geographic coverage

International

Language note

English