Taxing Where Value is Created: What’s 'User Involvement' Got to Do With It?

Becker, Johannes; Englisch, Joachim

doi:10.2139/ssrn.3258387

Cited by 7 publications

(4 citation statements)

References 2 publications

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“…Additionally, and most importantly, BEPS opportunities also damaged voluntary tax compliance systems, for all taxpayers, including individuals (OECD 2013a, 8). In effect, the political support that the abovementioned project received (a fact that definitely made the difference for its success in respect of previous OECD initiatives 21 ) may have emerged as a direct 17 For the discussion around the meaning of "value creation", see, for example, Becker and Englisch (2018), Christians (2018), Deveraux and Vella (2018), Hey (2018). In the author's opinion, the notion of value creation, that has to be analyzed under the particular political and economic context that gave birth to the BEPS Project, can perfectly be considered a "remake" (though hidden) of "source" (Riccardi 2020).…”

Section: Andrea Riccardimentioning

confidence: 99%

Implementing a (global?) minimum corporate income tax

Riccardi¹

2021

Nord J Law Soc

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Seven years have passed since the BEPS Action Plan was launched by the OECD, and Action 1 identified the tax challenges derived from the digitalization of the economy as a relevant area to be addressed. However, no concrete recommendations were delivered and, in an increasingly digitized economy, countries started acting unilaterally. Against this situation, as from January 2019, the stream of work at the OECD has changed and, apparently, a novel era - “BEPS 2.0” - has begun under the slogan of working on a “without prejudice” Almost eight years have passed since the BEPS Action Plan was launched by the OECD and Action 1 identified corporate income tax challenges derived from the digitalization of the economy as a relevant area to be addressed. As from January 2019, the stream of work at the OECD has changed. Apparently, a novel era - “BEPS 2.0” - has begun under the slogan of working on a “without prejudice” basis and a two-pillar approach with the aim of reaching an agreement on a global solution. Though the author recognizes the need to find a coordinated answer, she believes that in the construction of said solution, attention should be given to specific features and policy preferences evidenced by developing countries. Under this scenario, this contribution focuses on the so-called “Pillar Two” and assesses its “Global Anti-Base Erosion (GloBE) proposal” from said perspective. After her analysis, the author concludes that this rushed political-driven proposal not only has been designed in the benefit of major and more advanced economies, but it goes far more beyond “BEPS”. In this vein, the author advocates for concentrating the efforts and resources on a transparent discussion that directly addresses efficient and fairer nexus and profit allocation rules – main concern for developing countries and, in the autor´s view, the base problem to be solved.

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Section: Andrea Riccardimentioning

confidence: 99%

Implementing a (global?) minimum corporate income tax

Riccardi¹

2021

Nord J Law Soc

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“…Some observers distinguish between this type of "passive" data generation, provided unconsciously while consuming digital services, and "active" user contributions on social media platforms. In the case of passive data collection where the user's role is limited to their prior consent, it has been argued that it is the business and not the user who really "produces" the raw input data (Becker and Englisch, 2019). As such, "mere acquiescence" to being observed should not be deemed as co-creation of value by users.…”

Section: A the Usermentioning

confidence: 99%

“…A related proposal has been put forward by Becker and Englisch (2019), who define the concept of a "sustained user relationship" built on the repeated provision of online services over time. This concept can serve as a proxy for the potential to legally collect certain types of data from a user continuously and on a large scale, and to exploit them commercially.…”

Section: Investment-or Asset-based Approachesmentioning

confidence: 99%

Tec(h)tonic Shifts

Aslam¹,

Shah²

2020

IMF Working Papers

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The ever-increasing digitalization of businesses has accelerated the need to address the many shortcomings and unresolved issues within the international corporate income tax system. In particular, the customer or “user”—through their online activities—is now considered by many as being a critical driving force behind the value of digital services. Furthermore, the rapid growth of digital service providers over the last decade has made them an increasingly popular target for special taxes—similar to wealth and solidarity taxes—which can also help mobilize much-needed revenues in the wake of a crisis. This paper argues that a plausible conceptual case can be made to tax the value generated by users under the corporate income tax. However, a number of issues need to be tackled for user-based tax measures to become a reality, which include agreement among countries on whether user value justifies a reallocation of taxing rights, establishing the legal right to tax income derived from user value, as well as an appropriate metric for valuing user-generated data if it is ever to be used as a tax base. Furthermore, attempting to tax only certain types of business is ill-advised, especially as user data is now being exploited widely enough for it to be recognized as an input for almost all businesses. Several options present themselves for consideration—from a modified permanent establishment definition combined with taxation by formulary apportionment, to user-based royalty-type taxes—each with their own merits and misdemeanors.

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“…There is a contentious political and academic debate about the ability of traditional tax laws to effectively levy tax on digital economy companies (Becker & Englisch, 2019;Watanabe et al, 2018;Yang & Metallo, 2018). The world's discussion on the taxation of the digital economy can be traced back to as early as 1996.…”

Section: Introductionmentioning

confidence: 99%

A Principles – Based Assessment of The Quality of Zimbabwe’s Direct Tax Policy for The Digital Economy

Ndhlovu

2023

TIJAB

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Background: In 1998, under the Ottawa framework, the OECD and non-OECD countries agreed that any new taxation rules should adhere to the guiding principles, namely Neutrality, efficiency, certainty and simplicity, effectiveness, fairness flexibility (Cockfield, 2006). In the absence of an international consensus-based – taxation framework for the digital economy, a question arises on whether unilateral measures adopted by countries such as Zimbabwe comply with the principles of a good tax policy. Objective: The study aimed to examine the quality of Zimbabwe's direct tax policy for the economy based on the principles of a good tax policy prescribed by the Organisation for Economic Cooperations and Development (OECD). Method: The study was carried out under a pragmatic philosophical view and adopted a quantitative cross-sectional survey as the research design. Data collection was done using closed-ended questionnaires. The study population comprised 250 tax experts drawn from the Zimbabwe Revenue Authority (ZIMRA) representing tax administrators and private sector tax practitioners representing the taxpayers. Quantitative data was collected from a sample of 146 respondents. Systematic random sampling was used to select the respondents. Chi-squared test was used to analyze the data in SPSS. Results: The study revealed that among the overarching principles of a good tax policy, namely (1) Fairness; (2) Certainty and Simplicity; (3) Neutrality; (4) Efficiency, and (5) Effectiveness, Zimbabwe's tax policy for the digital economy only complies with the principles of Fairness, Certainty and Simplicity. Conclusion: The study established that, to a greater extent, Zimbabwe's tax policy for the digital economy needs to comply with the principles of a good tax policy. Keywords: digital economy; OECD, principles; taxation; Zimbabwe

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Taxing Where Value is Created: What’s 'User Involvement' Got to Do With It?

Cited by 7 publications

References 2 publications

Implementing a (global?) minimum corporate income tax

Implementing a (global?) minimum corporate income tax

Tec(h)tonic Shifts

A Principles – Based Assessment of The Quality of Zimbabwe’s Direct Tax Policy for The Digital Economy

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