Allocation of the Right to Tax Income from Digital Intermediary Platforms – Challenges and Possibilities for Taxation in the Jurisdiction of the User
Nordic Journal of Commercial Law, Issue 1, pp. 146-172, 2018, DOI: 10.5278/ojs.njcl.v0i1.2488
27 Pages Posted: 16 Dec 2018
Date Written: November 24, 2018
The authors analyse the current (lack of) possibilities for user-jurisdictions to tax the value generated by the increased use of digital intermediary platforms. Focus is on analysing the possibilities for user-jurisdictions to tax the remuneration received by a foreign enterprise owning a digital intermediary platform and on discussing whether the users’ provision of personal data in exchange for access to the platform could be considered a barter transaction for tax purposes in the user-jurisdiction. Among other things, it is concluded that user-jurisdictions, pursuant to current international tax treaties, will normally be precluded from taxing the income of foreign platform enterprises, as the platform enterprises are often able to deliver their digital services remotely. Against this background, a number of tax policy challenges and options of relevance for taxing platform enterprises are discussed, in particular the proposed directive on significant digital presence recently put forward by the European Commission. It is concluded that the proposal may prove to be an adequate step towards taxation in the user jurisdictions, even though the proposal needs further work in order to become sufficiently clear and targeted and the scope may be limited.
Keywords: Digital intermediary platforms, international tax law, jurisdiction to tax, user participation, tax treaties
Suggested Citation: Suggested Citation