The Superiority of the Digital Service Tax over Significant Digital Presence Proposals

Authors

Wei Cui, Allard School of Law at the University of British ColumbiaFollow

Faculty Author Type

Current Faculty [Wei Cui]

Document Type

Working Paper

Publication Date

7-30-2019

Subjects

digital services tax, significant digital presence, international taxation, tax treaties, profit attribution

Abstract

Responding to calls for reallocating taxing rights over multinationals’ profits to reflect the place of user value creation, the OECD recently announced a Program of Work to implement international tax reform. I use the European Commission’s 2018 proposal to introduce the “significant digital presence” concept into income tax treaties as an example of the type of approach the OECD favors, and argue that it is inferior to recently proposed digital services taxes (DSTs). DSTs directly address the question of where profits should be allocated and taxed, while SDP proposals subordinate this vital question to superfluous treaty conventions. Global tax coordination deserves better focal points.

Citation Details

Wei Cui, "The Superiority of the Digital Service Tax over Significant Digital Presence Proposals" (2019) [unpublished].