Addressing Tax Challenges in Digitalised Economy – Relevance of Data in Allocating Profits between Jurisdictions

Abstract

Taxing multinational enterprises operating in a digitalised economy has proved challenging. The ongoing Base Erosion and Profit Shifting Project has found it difficult to conclude on the issue. The Public Consultation Paper of the Inclusive Framework of the G20 BEPS Project has put forth some proposals for profit allocation amongst jurisdictions while recognising that data (especially, data generated by users) significantly create value for these enterprises. This article discusses the appropriateness and the practicality of data as a criterion for allocating profits between jurisdictions.

Keywords: BEPS, Data, value creation