Book contents
- Taxing the Digital Economy
- Cambridge Tax Law
- Taxing the Digital Economy
- Copyright page
- Dedication
- Contents
- Figures
- Preface
- Acknowledgements
- Part I
- 1 Taxing Cross-Border Business Income
- 2 The Development of Digital Business
- 3 Challenges to the Tax System Posed by the Digitalisation of Business
- 4 Responding to the Challenges
- Part II
- Index
3 - Challenges to the Tax System Posed by the Digitalisation of Business
from Part I
Published online by Cambridge University Press: 23 April 2021
- Taxing the Digital Economy
- Cambridge Tax Law
- Taxing the Digital Economy
- Copyright page
- Dedication
- Contents
- Figures
- Preface
- Acknowledgements
- Part I
- 1 Taxing Cross-Border Business Income
- 2 The Development of Digital Business
- 3 Challenges to the Tax System Posed by the Digitalisation of Business
- 4 Responding to the Challenges
- Part II
- Index
Summary
This chapter considers the key characteristics of the digitalised business models discussed in Chapter 2 and outlines seven key challenges to the current international tax system devised by the 1920s compromise. These are the vanishing ability to tax business profits, the use of data (and the corresponding difficulties of assessing contribution and value), the reliance and mobility of intellectual property, the characterisation of income, the failure of transfer pricing in certain multinational transactions, the inadequacy of residence-based taxation and, lastly, competition by states.These issues remain, making the current international tax system fragile to the expansion of highly digitalised business notwithstanding the outstanding and prompt action by the OECD on the BEPS action plan.
- Type
- Chapter
- Information
- Taxing the Digital EconomyTheory, Policy and Practice, pp. 84 - 111Publisher: Cambridge University PressPrint publication year: 2021