Taxing the Digital Economy in Developing Countries - A Legal Comparison Between OECD’s Pillar One and UN’s Article 12B
(2021) JURM02 20211Department of Law
Faculty of Law
- Abstract (Swedish)
- Beskattning av den digitala ekonomin har varit en av de mest centrala delarna i den internationella skattekontexten under det senaste decenniet. Digitaliseringen har gett upphov till nya affärsmodeller som har lett till ett ökat tryck på det internationella skattesystemet som inrättades på 1920-talet. Eftersom dagens internationella skatteregler inte har anpassats till den digitala affärsmiljön, finns det en globalt samstämmig uppfattning om att det internationella skattesystemet behöver reformeras.
För att hantera det globala fenomenet med digitaliseringen har två internationella institutioner lagt fram förslag som tar sikte på beskattningen av den digitala ekonomin. I oktober 2020 publicerade OECD/G20:s inkluderande ramverk den... (More) - Beskattning av den digitala ekonomin har varit en av de mest centrala delarna i den internationella skattekontexten under det senaste decenniet. Digitaliseringen har gett upphov till nya affärsmodeller som har lett till ett ökat tryck på det internationella skattesystemet som inrättades på 1920-talet. Eftersom dagens internationella skatteregler inte har anpassats till den digitala affärsmiljön, finns det en globalt samstämmig uppfattning om att det internationella skattesystemet behöver reformeras.
För att hantera det globala fenomenet med digitaliseringen har två internationella institutioner lagt fram förslag som tar sikte på beskattningen av den digitala ekonomin. I oktober 2020 publicerade OECD/G20:s inkluderande ramverk den senaste rapporten avseende Pelare 1. I augusti 2020 föreslog FN:s underkommitté för skatteutmaningar relaterade till digitaliseringen av ekonomin en ny skatteavtalsregel: Artikel 12B om inkomster från automatiska digitala tjänster. I april 2021 antogs det slutliga utkastet av Artikel 12B som kommer att införlivas i FN:s modellavtal.
Syftet med denna uppsats är att undersöka och jämföra OECD:s Pelare 1 och FN:s Artikel 12B för att identifiera och analysera likheterna och skillnaderna mellan de två förslagen. Vidare är syftet att avgöra vilket av förslagen som gynnar utvecklingsländer. För detta ändamål kommer begreppet inter-nation equity att användas som ett utvärderingskriterium.
Uppsatsen drar slutsatsen att Pelare 1 och Artikel 12B har vitala skillnader och få likheter. Utifrån begreppet inter-nation equity argumenterar denna uppsats för att Artikel 12B gynnar utvecklingsländer, eftersom den erbjuder en mindre komplex lösning som också kan leda till att fler skatteintäkter omfördelas till utvecklingsländer. I uppsatsen dras slutsatsen att det internationella skattesystemet historiskt sett har missgynnat utvecklingsländer. För att uppnå en långsiktig global lösning krävs därför att länders olika behov och förutsättningar beaktas. (Less) - Abstract
- The taxation of the digital economy has been the leading topic in the area of international taxation in the last decade. The ongoing digitalisation has introduced new business models which have led to increased pressure on the international tax system, which was established in the 1920s. As today’s international tax rules have not kept pace with the unique conditions linked to digital business models, there is a global view that the international tax system needs to be reformed.
To deal with this global phenomenon of digitalisation, two major international institutions have put forward proposals that aim to solve the tax challenges arising from the digital economy. In October 2020, the OECD/G20 Inclusive Framework published the Report... (More) - The taxation of the digital economy has been the leading topic in the area of international taxation in the last decade. The ongoing digitalisation has introduced new business models which have led to increased pressure on the international tax system, which was established in the 1920s. As today’s international tax rules have not kept pace with the unique conditions linked to digital business models, there is a global view that the international tax system needs to be reformed.
To deal with this global phenomenon of digitalisation, two major international institutions have put forward proposals that aim to solve the tax challenges arising from the digital economy. In October 2020, the OECD/G20 Inclusive Framework published the Report on Pillar One Blueprint. In August 2020, the UN Subcommittee on Tax Challenges Related to the Digitalization of the Economy proposed a new tax treaty rule: Article 12B on income from automated digital services. In April 2021, a final draft of Article 12B was adopted which will be incorporated in the 2021 UN Model.
The purpose of this thesis is to examine and compare the OECD’s Pillar One and the UN’s Article 12B in order to identify and analyse both similarities and differences between the two proposals. Further, the thesis aims to determine which of the proposals is in favour of developing countries. For this purpose, the concept of inter-nation equity has been applied as an evaluative criterion.
The thesis concludes that Pillar One and Article 12B have vital differences and few similarities. From the concept of inter-nation equity, this thesis argues that Article 12B is in favour of developing countries as it offers a less complex solution which may also lead to more tax revenues being reallocated to developing countries. The thesis concludes that the international tax system has historically disadvantaged developing countries. Therefore, reaching a sustainable global solution requires that countries’ different needs and capacities are taken into account. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9045380
- author
- Hadzovic, Elma LU
- supervisor
-
- Yvette Lind LU
- organization
- course
- JURM02 20211
- year
- 2021
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- skatterätt, international tax law, OECD, Pillar One, UN, Article 12B
- language
- English
- id
- 9045380
- date added to LUP
- 2021-06-09 11:57:10
- date last changed
- 2021-06-09 11:57:10
@misc{9045380,
abstract = {{The taxation of the digital economy has been the leading topic in the area of international taxation in the last decade. The ongoing digitalisation has introduced new business models which have led to increased pressure on the international tax system, which was established in the 1920s. As today’s international tax rules have not kept pace with the unique conditions linked to digital business models, there is a global view that the international tax system needs to be reformed.
To deal with this global phenomenon of digitalisation, two major international institutions have put forward proposals that aim to solve the tax challenges arising from the digital economy. In October 2020, the OECD/G20 Inclusive Framework published the Report on Pillar One Blueprint. In August 2020, the UN Subcommittee on Tax Challenges Related to the Digitalization of the Economy proposed a new tax treaty rule: Article 12B on income from automated digital services. In April 2021, a final draft of Article 12B was adopted which will be incorporated in the 2021 UN Model.
The purpose of this thesis is to examine and compare the OECD’s Pillar One and the UN’s Article 12B in order to identify and analyse both similarities and differences between the two proposals. Further, the thesis aims to determine which of the proposals is in favour of developing countries. For this purpose, the concept of inter-nation equity has been applied as an evaluative criterion.
The thesis concludes that Pillar One and Article 12B have vital differences and few similarities. From the concept of inter-nation equity, this thesis argues that Article 12B is in favour of developing countries as it offers a less complex solution which may also lead to more tax revenues being reallocated to developing countries. The thesis concludes that the international tax system has historically disadvantaged developing countries. Therefore, reaching a sustainable global solution requires that countries’ different needs and capacities are taken into account.}},
author = {{Hadzovic, Elma}},
language = {{eng}},
note = {{Student Paper}},
title = {{Taxing the Digital Economy in Developing Countries - A Legal Comparison Between OECD’s Pillar One and UN’s Article 12B}},
year = {{2021}},
}