Bartering with Big Tech: A Theoretical Application of GST to the Digital Economy

43 Pages Posted: 30 Mar 2020

See all articles by Leilani Taula

Leilani Taula

Victoria University of Wellington, Faculty of Law, Student/Alumni

Date Written: September 2, 2019

Abstract

The world in which taxation takes place is a far cry from what it was 50 years ago. However, the digital economy has changed the way businesses operate faster than domestic and international tax laws have been able to account for these changes. Consequentially, there is significant international concern about how the taxation problems brought about by the digital economy should be addressed. One method of taxation that has not seen much discussion in this context is New Zealand’s Goods and Services Tax system. Internet users are arguably bartering their data and attention for remote services. If data and attention are consideration for GST purposes, and the value of that consideration can be calculated, in theory, GST may apply. The practical problems this kind of tax treatment may face are not insignificant; for example, developing an appropriate and practical valuation method for data and attention. However, with problems as complicated as those posed by the digital economy, it seems prudent to explore all potential solutions.

Keywords: Digital economy, taxation, GST, barter, base erosion and profit shifting, data, attention

JEL Classification: K00, K34

Suggested Citation

Taula, Leilani, Bartering with Big Tech: A Theoretical Application of GST to the Digital Economy (September 2, 2019). Victoria University of Wellington Legal Research Paper No. 9/2020, Available at SSRN: https://ssrn.com/abstract=3563892 or http://dx.doi.org/10.2139/ssrn.3563892

Leilani Taula (Contact Author)

Victoria University of Wellington, Faculty of Law, Student/Alumni ( email )

PO Box 600
Wellington, Victoria 6140
New Zealand

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