Tax Revenue Loss in the Digital Economy

Mingcheng Li ()
Additional contact information
Mingcheng Li: Anhui University, School of Economics

A chapter in Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025), 2025, pp 361-365 from Springer

Abstract: Abstract The rapid development of the digital economy poses severe challenges to the traditional tax system. New business models such as cross - border data flows, virtual transactions, and platform economies have made issues like tax source definition, tax jurisdiction, and profit allocation increasingly complex. This paper analyzes the main impacts of the digital economy on tax collection and administration, including tax base erosion, intensified tax competition, and the reduced applicability of the traditional permanent establishment principle. Meanwhile, it explores the reform plans of the international community to address digital economy tax issues, such as the “Two - Pillar” framework (global minimum tax rate and profit reallocation rules) proposed by the OECD, as well as the practices of various countries in digital service taxes (DST). Finally, this paper puts forward suggestions for improving digital economy tax policies, including strengthening international coordination, optimizing tax jurisdiction rules, and promoting digital tax collection and administration, so as to promote tax fairness and sustainable economic development.

Keywords: Digital Economy; Tax Challenges; Base Erosion; Two-Pillar Approach; Digital Services Tax (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-770-0_41

Ordering information: This item can be ordered from
http://www.springer.com/9789464637700

DOI: 10.2991/978-94-6463-770-0_41

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().