The Superiority of the Digital Services Tax over Significant Digital Presence Proposals

Forthcoming, National Tax Journal

28 Pages Posted: 30 Jul 2019 Last revised: 22 Aug 2019

See all articles by Wei Cui

Wei Cui

University of British Columbia (UBC), Faculty of Law

Date Written: July 26, 2019

Abstract

Responding to calls for reallocating taxing rights over multinationals’ profits to reflect the place of user value creation, the OECD recently announced a Program of Work to implement international tax reform. I use the European Commission’s 2018 proposal to introduce the “significant digital presence” concept into income tax treaties as an example of the type of approach the OECD favors, and argue that it is inferior to recently proposed digital services taxes (DSTs). DSTs directly address the question of where profits should be allocated and taxed, while SDP proposals subordinate this vital question to superfluous treaty conventions. Global tax coordination deserves better focal points.

Keywords: digital services tax, significant digital presence, international taxation, tax treaties, profit attribution

JEL Classification: H21, H25, K34, M37, M48

Suggested Citation

Cui, Wei, The Superiority of the Digital Services Tax over Significant Digital Presence Proposals (July 26, 2019). Forthcoming, National Tax Journal. Available at SSRN: https://ssrn.com/abstract=3427313 or http://dx.doi.org/10.2139/ssrn.3427313

Wei Cui (Contact Author)

University of British Columbia (UBC), Faculty of Law ( email )

1822 East Mall
Vancouver, British Columbia V6T1Z1
Canada
6048274765 (Phone)

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