Title Taxing the digital economy : theory, policy, and practice / Craig Elliffe, University of Auckland Faculty of Law

Published Cambridge, United Kingdom ; New York, NY : Cambridge University Press, 2021

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Description 1 online resource (xiv, 340 pages) : illustrations Series Cambridge tax law Cambridge tax law series. Contents Cover -- Half-title -- Series information -- Title page -- Copyright information -- Dedication -- Contents -- List of Figures -- Preface -- Background to This Book -- Structure of the Book -- Acknowledgements -- Part I -- 1 Taxing Cross-Border Business Income -- 1.1 What Is Cross-Border Taxation? -- 1.1.1 Introduction -- 1.1.2 Income Tax and Cross-Border Trade: A Relatively Recent Phenomenon -- 1.2 Fundamental Concepts of International Taxation: Residence and Source -- 1.2.1 Residence Taxation -- 1.2.2 Source Taxation 1.2.3 The International Tax Dilemma Arising from the Competing Demands of Residence and Source Taxation -- 1.3 The History of International Double Taxation: The ''1920s Compromise'' -- 1.3.1 Observation One: The Recommendation Was to Allocate Taxing Rights for Different Categories of Income between Residence and Source Countries 1.3.2 Observation Two: The Recommendation Recognises the Competing Claims of Source and Residence Taxation, Acknowledging That Source Countries Have the First Opportunity and Right to Tax, While the 1923 Report Suggested a Theoretical Preference for Residence Taxation, Later Discussions Were Far More Pragmatic -- 1.3.3 Reflections on the 1920s Compromise -- 1.4 Justifying Source and Residence Taxation -- 1.4.1 What Are the Benefit and the Ability to Pay Theories? -- 1.4.2 A Brief History of the Development of the Theories -- 1.4.3 The Ability to Pay Theory and Taxing Non-Residents 1.4.4 The Renaissance of the Benefit Theory -- 1.4.5 The Benefit Theory in the Digital Age: Does the Absence of Physical Presence in a Jurisdiction Nullify the Source Jurisdiction's Taxing Rights? -- (a) The Wayfair Decision -- (b) Is There a Requirement That You Can Only Recognise the Benefits Provided to Non-Resident Businesses Where They Have a Physical Presence in the Country of Source? -- (c) The Source Country Contribution to Digital Businesses -- 1.5 The Benefit Theory and Its Relationship to Value Creation -- 1.5.1 The Origin and Purpose of the Concept of Value Creation 1.5.2 As a Concept of Principle It Is Vague and Indistinct -- 1.5.3 Alignment with the Benefit Theory -- 1.5.4 Is Value Creation Different from the Existing International Tax Principles? Can It Be Constrained by the Pragmatism of the 1920s Compromise? -- 1.5.5 The Relationship between Value Creation and the Existing International Tax Framework -- 1.5.6 Conclusion -- 1.6 Observations about Source and Residence Taxation in the Context of Cross-Border Business -- 1.6.1 Residence-Based Corporate Tax Is Contestable but It Acts as a Backstop Summary "In 2018, the total global e-commerce market worth roughly USD 7.7 trillion. Despite the size of this economy and its extraordinary growth rate, many multinational companies paid little tax in the countries in which they did business. This is not a problem that can be ignored. Digital companies grow much faster than other firms. In 2006, technology companies accounted for 7% of the top 20 market capitalisation of EU companies, by 2017 this had grown to 54%. Digital companies rely less on physical presence utilising intellectual property, enabling companies to set up a business far away from their consumers, where some of the actual economic activity takes place. Most concerning is the fact that, on average, digitalised businesses face an effective tax rate of only 9.5% compared to 23.2% for traditional business models.1 Consequently, there is widespread concern from governments and the public about the low level of income tax paid by companies operating in the digital economy"-- Provided by publisher Bibliography Includes bibliographical references and index Notes Description based on online resource; title from digital title page (viewed on May 04, 2021) Subject Corporations -- Taxation -- European Union countries -- Data processing Electronic commerce -- Taxation -- Law and legislation -- European Union countries Corporations -- Taxation -- Law and legislation -- European Union countries Information technology -- Economic aspects -- European Union countries Corporations -- Taxation -- Data processing Corporations -- Taxation -- Law and legislation Electronic commerce -- Taxation -- Law and legislation Information technology -- Economic aspects European Union countries Form Electronic book LC no. 2020043495 ISBN 9781108750691 1108750699

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