Taxing Direct Sales of Digital Services: A Plea for Regulated and Internationally Coordinated Profit Splitting
Wolfram Richter
No 7017, CESifo Working Paper Series from CESifo
Abstract:
The employment of capital is rival in nature. Small countries do not benefit from taxing its employment. By contrast, the use of digital services is non-rival and small countries do benefit from taxing expenditures on such services. In fact, some countries have already decided to tax digital activities. If such practice spreads, the development of digital services is negatively affected. It is argued that countries exporting digital services have reason to respond by promoting an international tax regime in which the right of taxing the profit earned on the direct sales of digital services is split between the countries involved.
Keywords: taxing digital services; import tax; tax exemption; profit splitting; Shapley value (search for similar items in EconPapers)
JEL-codes: H25 M48 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-acc, nep-gth and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7017
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