Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy

63 Pages Posted: 29 Mar 2015

See all articles by Peter Hongler

Peter Hongler

Zurich University of Applied Sciences

Pasquale Pistone

Vienna University of Economics and Business

Multiple version iconThere are 2 versions of this paper

Date Written: January 1, 2015

Abstract

This paper outlines the core issues of the introduction of a new PE nexus based on digital presence. It puts forward its essential features and rethinks the foundations of the concept of sourcing for income tax purposes in the global economy. Our proposal of a new PE nexus based on digital presence is also supported by a theoretical reconstruction in the light of a new dimension for the benefit theory.

Our work directly relates to Action 1 of the OECD/G20 BEPS Project. However, the development of a new PE nexus is in fact not an instrument to counter BEPS, but reflects a structural revision of the criteria for allocating taxing rights on cross-border business income in the era of the digital economy.

Keywords: Tax, Digital Economy, International Taxation, BEPS, International Tax Regime, Tax Reform, Permanent Establishment, Nexus, Benefit Theory

JEL Classification: K34, K33

Suggested Citation

Hongler, Peter and Pistone, Pasquale, Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy (January 1, 2015). Available at SSRN: https://ssrn.com/abstract=2586196 or http://dx.doi.org/10.2139/ssrn.2586196

Peter Hongler

Zurich University of Applied Sciences ( email )

Institut fuer Angewandte Medienwissenschaft
Zur Kesselschmiede 35
Winterthur, CH 8401
Switzerland

Pasquale Pistone (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

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