OECD BEPS (In)Action 1: Factor Presence as a Solution to Tax Issues of the Digital Economy

Gianni, Monica

doi:10.2139/ssrn.3211971

Cited by 1 publication

(1 citation statement)

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“…Domestic laws and treaties of most countries require some physical presence either directly or through an agent for a country to assert taxing jurisdiction over a non-resident company's business profits. A proven means of applying income taxation based on significant economic presence is the "factor presence nexus," adopted by the US Multistate Tax Commission (MTC) as a model statute for states on October 17, 2002(Gianni, 2018. The significant economic presence proposal in a jurisdiction arises when a non-resident enterprise has a significant economic presence based on the factor that evidences a purposeful and sustained interaction with the jurisdiction via digital technology and other automated tools.…”

Section: Nexus Rules and Significant Economic Presencementioning

confidence: 99%

Fiscal Policy Perspective on Virtual Business During COVID-19 and Its Challenges: The Case of Indonesia

Saptono¹,

Ayudia²

2020

IJSRP

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This study has two objectives. The first aim is to examine tax policies on virtual businesses in Indonesia. Government Regulation in Lieu of Law Number 1 of 2020, promulgated into Law Number 2 of 2020, regulates taxation policies on trade through electronic systems. This law is an integral part of the regulations regarding the handling of the COVID-19 pandemic. The second objective is to analyze the potential challenges that arise in tax policy implementation on virtual businesses. This study is qualitative research with data collection techniques in the form of documentation and literature studies. The research concludes that the implementation of VAT on PMSE does not violate the consensus or legal character of VAT in concept. However, the imposition of income tax and electronic transaction tax still creates polemics due to conflicts with the tax treaty provisions. Furthermore, the Government's biggest challenge is the courage to set taxes on digital companies over the top, considering that Indonesia has bargaining power. Besides, the Indonesian Government needs to maximize big data analysis and Automatic Exchange of Information (AEoI) to overcome the possibility of fraud.

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Section: Nexus Rules and Significant Economic Presencementioning

confidence: 99%