While space may be the final frontier for human exploration, back here on Earth, digital space may be the final frontier for human taxation. Allocating taxing rights to address commerce that lacks a physical market presence has confounded and inspired tax professionals, politicians, and policy makers of the current generation.
This Special Report on the Digital Economy highlights the efforts of the OECD to tackle the challenge, while trying to fend off unilateral efforts to tax digital commerce by France, Italy, Malaysia, Singapore, the U.K., and New Zealand, among others. The report concludes with a look at alternatives to uncoordinated unilateral tax measures.
The irony is not lost on observers of the global tax scene that the first of the OECD’s 15 BEPS action items, Tax Challenges Arising from Digitalisation, has proven the trickiest to tackle. Long after 134 jurisdictions adopted the Inclusive Framework on BEPS, the OECD is laboring diligently to find consensus on the challenging task of allocating taxing rights to the fastest-growing segment of the economy: digital commerce. Time will tell whether the OECD can conquer this frontier.
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