Digital Services Taxes and the Unified Approach under the Pillar One Proposal: Exploring the Nexus Frameworks Through the Example of Alibaba

Australian Tax Review (2020) volume 49, issue 4, "Special Issue on International Tax"

24 Pages Posted: 1 Jun 2021

See all articles by Victoria Plekhanova

Victoria Plekhanova

Massey University - Massey University Auckland

Date Written: November 1, 2020

Abstract

With the rise of online marketplaces operating across national borders, many customer jurisdictions have found themselves lacking an opportunity to tax profits from these marketplaces’ activities. The year 2021 will reveal whether there is an international agreement that gives customer jurisdictions the entitlement to tax these profits under the existing international income tax system, or whether these jurisdictions have no option but to create this entitlement unilaterally and outside this system. This article uses the example of Alibaba and its Taobao business to compare nexus frameworks offered by a digital services tax unilaterally introduced in some jurisdictions and the OECD’s Unified Approach under the Pillar One proposal for the international agreement.

Keywords: taxation of digital services, Pillar One proposal, digital services tax, DST

JEL Classification: K34

Suggested Citation

Plekhanova, Victoria, Digital Services Taxes and the Unified Approach under the Pillar One Proposal: Exploring the Nexus Frameworks Through the Example of Alibaba (November 1, 2020). Australian Tax Review (2020) volume 49, issue 4, "Special Issue on International Tax", Available at SSRN: https://ssrn.com/abstract=3856721

Victoria Plekhanova (Contact Author)

Massey University - Massey University Auckland ( email )

Private Bag 102904
North Shore Mail Centre
Auckland, 0745
New Zealand

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