Allocation of the Right to Tax Income from Digital Intermediary Platforms: Challenges and Possibilities for Taxation in the Jurisdiction of the User

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

The authors analyse the current (lack of) possibilities for userjurisdictions to tax the value generated by the increased use of digital intermediary platforms. Focus is on analysing the possibilities for userjurisdictions to tax the remuneration received by a foreign enterprise owning a digital intermediary platform and on disucussing whether the users’ provision of personal data in exchange for access to the platform could be considered a barter transaction for tax purposes in the userjurisdiction. Among other things, it is concluded that user-jurisdictions, pursuant to current international tax treaties, will normally be precluded from taxing the income of foreign platform enterprises, as the platform enterprises are often able to deliver their digital services remotely. Against this background, a number of tax policy challenges and options of relevance for taxing platform enterprises are discussed, in particular the proposed directive on significant digital presence recently put forward by the European Commisssion. It is concluded that the proposal may prove to be an adequate step towards taxation in the userjurisdictions, even though the proposal needs further work in order to become sufficiently clear and targeted and the scope may be limited.
The authors analyse the current (lack of) possibilities for userjurisdictions to tax the value generated by the increased use of digital intermediary platforms. Focus is on analysing the possibilities for userjurisdictions to tax the remuneration received by a foreign enterprise owning a digital intermediary platform and on disucussing whether the users’ provision of personal data in exchange for access to the platform could be considered a barter transaction for tax purposes in the userjurisdiction. Among other things, it is concluded that user-jurisdictions, pursuant to current international tax treaties, will normally be precluded from taxing the income of foreign platform enterprises, as the platform enterprises are often able to deliver their digital services remotely. Against this background, a number of tax policy challenges and options of relevance for taxing platform enterprises are discussed, in particular the proposed directive on significant digital presence recently put forward by the European Commisssion. It is concluded that the proposal may prove to be an adequate step towards taxation in the userjurisdictions, even though the proposal needs further work in order to become sufficiently clear and targeted and the scope may be limited.
LanguageEnglish
JournalNordic Journal of Commercial Law
Issue number1
Pages146-171
Number of pages26
StatePublished - 22 Nov 2018

Cite this

@article{849954f094264a0196dd9935cc60f1fe,
title = "Allocation of the Right to Tax Income from Digital Intermediary Platforms: Challenges and Possibilities for Taxation in the Jurisdiction of the User",
abstract = "The authors analyse the current (lack of) possibilities for userjurisdictions to tax the value generated by the increased use of digital intermediary platforms. Focus is on analysing the possibilities for userjurisdictions to tax the remuneration received by a foreign enterprise owning a digital intermediary platform and on disucussing whether the users’ provision of personal data in exchange for access to the platform could be considered a barter transaction for tax purposes in the userjurisdiction. Among other things, it is concluded that user-jurisdictions, pursuant to current international tax treaties, will normally be precluded from taxing the income of foreign platform enterprises, as the platform enterprises are often able to deliver their digital services remotely. Against this background, a number of tax policy challenges and options of relevance for taxing platform enterprises are discussed, in particular the proposed directive on significant digital presence recently put forward by the European Commisssion. It is concluded that the proposal may prove to be an adequate step towards taxation in the userjurisdictions, even though the proposal needs further work in order to become sufficiently clear and targeted and the scope may be limited.",
author = "Kj{\ae}rsgaard, {Louise Fjord} and Schmidt, {Peter Koerver}",
year = "2018",
month = "11",
day = "22",
language = "English",
pages = "146--171",
journal = "Nordic Journal of Commercial Law",
issn = "1459-9686",
number = "1",

}

TY - JOUR

T1 - Allocation of the Right to Tax Income from Digital Intermediary Platforms

T2 - Nordic Journal of Commercial Law

AU - Kjærsgaard,Louise Fjord

AU - Schmidt,Peter Koerver

PY - 2018/11/22

Y1 - 2018/11/22

N2 - The authors analyse the current (lack of) possibilities for userjurisdictions to tax the value generated by the increased use of digital intermediary platforms. Focus is on analysing the possibilities for userjurisdictions to tax the remuneration received by a foreign enterprise owning a digital intermediary platform and on disucussing whether the users’ provision of personal data in exchange for access to the platform could be considered a barter transaction for tax purposes in the userjurisdiction. Among other things, it is concluded that user-jurisdictions, pursuant to current international tax treaties, will normally be precluded from taxing the income of foreign platform enterprises, as the platform enterprises are often able to deliver their digital services remotely. Against this background, a number of tax policy challenges and options of relevance for taxing platform enterprises are discussed, in particular the proposed directive on significant digital presence recently put forward by the European Commisssion. It is concluded that the proposal may prove to be an adequate step towards taxation in the userjurisdictions, even though the proposal needs further work in order to become sufficiently clear and targeted and the scope may be limited.

AB - The authors analyse the current (lack of) possibilities for userjurisdictions to tax the value generated by the increased use of digital intermediary platforms. Focus is on analysing the possibilities for userjurisdictions to tax the remuneration received by a foreign enterprise owning a digital intermediary platform and on disucussing whether the users’ provision of personal data in exchange for access to the platform could be considered a barter transaction for tax purposes in the userjurisdiction. Among other things, it is concluded that user-jurisdictions, pursuant to current international tax treaties, will normally be precluded from taxing the income of foreign platform enterprises, as the platform enterprises are often able to deliver their digital services remotely. Against this background, a number of tax policy challenges and options of relevance for taxing platform enterprises are discussed, in particular the proposed directive on significant digital presence recently put forward by the European Commisssion. It is concluded that the proposal may prove to be an adequate step towards taxation in the userjurisdictions, even though the proposal needs further work in order to become sufficiently clear and targeted and the scope may be limited.

M3 - Journal article

SP - 146

EP - 171

JO - Nordic Journal of Commercial Law

JF - Nordic Journal of Commercial Law

SN - 1459-9686

IS - 1

ER -