Proposals on digital economy taxation | Practical Law
A summary of the three projects, following on from the BEPS Action 1 report, that are considering what (if any) long-term changes should be made to the international tax rules (nexus rules and "arm's length" principle) to reflect how value is created in the digital economy, and interim measures to tax value from user participation. In addition to the work of the OECD's Task Force on the Digital Economy (TFDE), the European Commission's proposed Directives for a digital PE (significant economic presence) and a digital services tax (or, possibly, a digital advertising tax), and the UK government's proposed digital services tax and position papers on corporate tax and the digital economy, this note summarises action in the UK to address the challenges to VAT posed by digitalisation.