Proposals on digital economy taxation | Practical Law

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.

Proposals on digital economy taxation

Practical Law UK Practice Note Overview w-014-7292 (Approx. 101 pages)

Proposals on digital economy taxation

by Practical Law Tax
Law stated as at 03 Nov 2021 • United Kingdom
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.
NOTE: This document has been superseded by Practice note, OECD Inclusive Framework two-pillar proposal on addressing (direct) tax challenges from digitalisation, which sets out the two-pillar solution to the direct tax issues identified in the BEPS Action 1 report, and Practice notes, European Commission proposals for a digital permanent establishment and temporary digital services tax, VAT measures addressing tax challenges from digitalisation of economy and Common reporting obligations of platform operators that cover the European Commission's proposals in this area, changes to address the VAT challenges posed by digitalisation of the economy and the UK's implementation of the OECD model rules for reporting by digital platform operators.