Taxing Capital in the Age of Intangibles

Dan Ciuriak and Akinyi J. Eurallyah. 2021. "Taxing Capital in the Age of Intangibles," Centre for International Governance Innovation, November 5, 2021. https://www.cigionline.org/articles/taxing-capital-in-the-age-of-intangibles/

14 Pages Posted: 13 Sep 2021 Last revised: 8 Nov 2021

See all articles by Dan Ciuriak

Dan Ciuriak

Ciuriak Consulting Inc.; Centre for International Governance Innovation (CIGI); C.D. Howe Institute; Asia Pacific Foundation of Canada; BKP Development Research & Consulting GmbH

Eurallyah Akinyi

affiliation not provided to SSRN

Date Written: September 9, 2021

Abstract

The rise of the intangibles economy has led to a significant erosion of corporate tax revenue in the innovation-intensive advanced economies, even as the share of national income flowing to capital rose. For developing countries, the erosion is worse and comes on top of substantial erosion of corporate tax revenues from the tangibles economy due to weak tax administration and corruption. In this paper, we take up the questions of how big is the taxing problem that the intangibles economy has raised, and whose problem is it. Further, we consider how well the proposed OECD/G20 Inclusive Framework measures up in responding to this problem. We conclude that the importance of tax reform in the modern digitalizing economy goes beyond preventing base erosion and profit shifting for it is about sustainable development and future prosperity. And whether we are there yet is a matter of wait and see.

Keywords: BEPS, Inclusive Framework, digital services tax, intangible capital assets, taxing capital, tax havens

JEL Classification: K34

Suggested Citation

Ciuriak, Dan and Akinyi, Eurallyah, Taxing Capital in the Age of Intangibles (September 9, 2021). Dan Ciuriak and Akinyi J. Eurallyah. 2021. "Taxing Capital in the Age of Intangibles," Centre for International Governance Innovation, November 5, 2021. https://www.cigionline.org/articles/taxing-capital-in-the-age-of-intangibles/, Available at SSRN: https://ssrn.com/abstract=3920763 or http://dx.doi.org/10.2139/ssrn.3920763

Dan Ciuriak (Contact Author)

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Eurallyah Akinyi

affiliation not provided to SSRN

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