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European Commission's proposal to implement a new permanent establishment nexus based on significant digital presence - Is it compliant with the EU Law and international tax principles?

Nogueira, Lara LU (2018) HARN60 20181
Department of Business Law
Abstract
The taxation of the digital economy has become a relevant subject, as business
models and value creation chains of all sectors have been transformed
bringing challenges to the international tax system and parameters for the
allocation of taxing rights between source and residence jurisdictions. In view
of these changes, the European Commission has published two proposals for
directives on the taxation of digital activities, proposing solutions to be
harmonized into the system of direct taxation of Member States.
From the analysis of these directives, the new proposal for the implementation
of a new PE nexus based on significant digital presence stands out. The
present work aims to develop a critical assessment of its legal basis... (More)
The taxation of the digital economy has become a relevant subject, as business
models and value creation chains of all sectors have been transformed
bringing challenges to the international tax system and parameters for the
allocation of taxing rights between source and residence jurisdictions. In view
of these changes, the European Commission has published two proposals for
directives on the taxation of digital activities, proposing solutions to be
harmonized into the system of direct taxation of Member States.
From the analysis of these directives, the new proposal for the implementation
of a new PE nexus based on significant digital presence stands out. The
present work aims to develop a critical assessment of its legal basis and to
answer the question of whether the change of the permanent establishment
nexus should be treated as an internal market initiative instead of an
international agreement and whether the proposal respects proportionality in
light of other possible measures, according to the EU law and other
international principles.
The paper intends to provide a broad overview of the theme, starting from the
validity of the source taxation rules in the digital economy and the connection
of the concept of permanent establishment with the allocation of taxing rights.
Following, the details of the proposal, its motivations and the potential impact
on the international tax system will be exposed. Finally, other possible
solutions to tackle the challenges of the digital economy will be examined
combined with the assessment of the proportionality of the proposal and its
compatibility with the Ottawa Principles. (Less)
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author
Nogueira, Lara LU
supervisor
organization
course
HARN60 20181
year
type
H1 - Master's Degree (One Year)
subject
keywords
Taxation of the Digital Economy, New permanent establishment nexus based on significant digital presence, Proportionality of the proposal and its compatibility with the Ottawa Principles.
language
English
id
8943753
date added to LUP
2018-06-14 11:47:01
date last changed
2018-06-14 11:47:01
@misc{8943753,
  abstract     = {The taxation of the digital economy has become a relevant subject, as business
models and value creation chains of all sectors have been transformed
bringing challenges to the international tax system and parameters for the
allocation of taxing rights between source and residence jurisdictions. In view
of these changes, the European Commission has published two proposals for
directives on the taxation of digital activities, proposing solutions to be
harmonized into the system of direct taxation of Member States. 
From the analysis of these directives, the new proposal for the implementation
of a new PE nexus based on significant digital presence stands out. The
present work aims to develop a critical assessment of its legal basis and to
answer the question of whether the change of the permanent establishment
nexus should be treated as an internal market initiative instead of an
international agreement and whether the proposal respects proportionality in
light of other possible measures, according to the EU law and other
international principles. 
The paper intends to provide a broad overview of the theme, starting from the
validity of the source taxation rules in the digital economy and the connection
of the concept of permanent establishment with the allocation of taxing rights.
Following, the details of the proposal, its motivations and the potential impact
on the international tax system will be exposed. Finally, other possible
solutions to tackle the challenges of the digital economy will be examined
combined with the assessment of the proportionality of the proposal and its
compatibility with the Ottawa Principles.},
  author       = {Nogueira, Lara},
  keyword      = {Taxation of the Digital Economy,New permanent establishment nexus based on significant digital presence,Proportionality of the proposal and its compatibility with the Ottawa Principles.},
  language     = {eng},
  note         = {Student Paper},
  title        = {European Commission's proposal to implement a new permanent establishment nexus based on significant digital presence - Is it compliant with the EU Law and international tax principles?},
  year         = {2018},
}