Is Cloud Computing a Challenge to the Traditional Concept of a Permanent Establishment?

International Tax Report, March 2014

54 Pages Posted: 4 Nov 2015 Last revised: 7 Nov 2015

Date Written: August 10, 2013

Abstract

Cloud computing services represent a change in the modern business behavior. There are few rules addressing cloud issues such as data and service location, as well the jurisdiction to tax these services. Considering such an environment, this article discusses the application of traditional international tax rules and concepts, which were constructed for ordinary services, to a virtualized environment, and addresses, in particular, jurisdictional tax issues in relation to cloud services. For this purpose, it was discussed the main features of cloud services and the problem of location of data. In the tax field, the discussion encompassed the principles and concepts that involve cloud services and international taxation until 2013. Lastly, the article discussed proposals that supposedly better addressed the jurisdictional problems with the international taxation caused by digital services, including the hitherto embryonic OECD BEPS.

Keywords: cloud computing, taxation, BEPS, Permanent Establishement, PE concept, digital economy

Suggested Citation

Rossi, Maria Cecilia, Is Cloud Computing a Challenge to the Traditional Concept of a Permanent Establishment? (August 10, 2013). International Tax Report, March 2014. Available at SSRN: https://ssrn.com/abstract=2685649 or http://dx.doi.org/10.2139/ssrn.2685649

Maria Cecilia Rossi (Contact Author)

Queen Mary, University of London ( email )

Mile End Road
London, E1 4NS
United Kingdom

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