National digital taxes – Lessons from Europe

Abstract

Digitalisation has done more to shape the 21st century than virtually any other phenomenon. However, international tax law has seemingly failed to keep pace with rapid technological developments, which has likely led to inequalities between the tax burden of traditional and digital business models. Thus far, there has been no consensus regarding the issue of fair taxation of the digital economy at the international and EU level. As European policymakers have begun to experience noticeable amounts of pressure to act, several EU countries have pushed forward and introduced unilateral measures to ensure they receive a fair share of the tax revenues pie. However, it is unclear whether national digital taxes can overcome the tax challenges stemming from the increasing digitalisation of the economy. Thus, newly proposed and implemented national digital taxes in Europe are thoroughly elaborated in the context of their relationship with double tax treaty law, the perils of double/ multiple taxation, their coherence with European law, their global and regional impact on competition and competitiveness, their contribution to tax revenues and the establishment of fair taxation conditions. The analysis concludes with a presentation of pertinent suggestions regarding national and supranational tax policy.

Digital Services Taxes: The International Experience and Relevance for the Russian Federation

“…In response to the deadlock at the OECD and EU levels, some countries moved forward with introduction of uniliteral measures regarding the issue of a fair taxation of the digital economy (Geringer, 2020). France was one of the first countries that enacted the digital services tax.…”

“…That is why some countries have started to apply unilateral measures. The implementation of national digital tax is accompanied by many side-effects (Geringer, 2020). It will take long time to find a unified solution.…”

“…3 Over the past few years, the Organization for Economic Cooperation and Development (hereinafter -the OECD), as well as the European Union (hereinafter -the EU) have made several attempts to find a solution to the tax problems of digitalization. However, so far, neither has succeeded in carving out proposals that would be acknowledged by a broad consensus (Geringer, 2020).…”

Emphasizing Inter-Nation Equity in the New Digital Economys Taxing Rights Allocation Scheme

“…The growth of the digital economy has an impact on various aspects of life. The increase in digitalization has made a significant contribution to the 21st century and brought drastic changes in routine (Geringer, 2021). Economic digitalization in the form of advances in Information and Communication Technology (ICT) has changed business dynamics, increased productivity, and expanded industry in many countries (Yuan et al, 2021).…”

Fiscal Policy Perspective on Virtual Business During COVID-19 and Its Challenges: The Case of Indonesia

“…A proposed digital services tax accompanied the directive's draft regarding the creation of a "significant digital presence" as an additional anchor for the allocation of revenues on revenues generated from providing certain digital services. Regarding its design, the characteristic of the EU digital services tax (EU DST) is a "hybrid tax" that embodies elements of an income tax and a consumption tax (Geringer, 2020). The tax base is the gross amount of the transaction.…”