The allocation of taxing rights for highly digitalised business models : in search of a fair and neutral solution

Resource Information

The work The allocation of taxing rights for highly digitalised business models : in search of a fair and neutral solution 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

The allocation of taxing rights for highly digitalised business models : in search of a fair and neutral solution

Creator

• Gómez Requena, J.Á

Subject

• Unified Approach (OECD)
• allocation of profits
• allocation of taxing rights
• digital economy
• BEPS Project (OECD)
• nexus
• tax treaty
• user participation
• value creation
• e-commerce

Language

eng

Summary

The aim of this article is to analyse the impact of highly digitalised business models on the distribution of taxing rights. The challenge encompasses the rules on the nexus and the allocation of profits, which require a modification to empower the source/market states and thus comply with the post-BEPS mandate of taxation in the territory where value is generated. Highly digitalised business models take advantage of data and user-generated content to create value and obtain profits. In the authorþs opinion, the solution to this problem must be respectful with the OECD Ottawa Taxation Framework Conditions for e-commerce, especially with tax neutrality and fairness. Given the difficult scenario of implementing a concept of virtual permanent establishment in the short and medium term, the author proposes three alternatives that respect tax neutrality and tax fairness, empowering the source/market states more:1. Creating a new income from the provision of advertising services in the Taxation Conventions 2. The expansive interpretation of the concept of royalties to include cloud-based services, and 3. A new Residual Profit Split Method that contains supply-side and demand-side factors

Citation source

In: Revista Técnica Tributaria : AEDAF - Madrid. - (2020), no. 128 ; p. 117-141

Geographic coverage

• European Union
• Europe

Language note

English