Digital taxation is an international challenge
Within the European Union (EU), proposals are already being adopted to address a new framework
The effects of digitalisation on consumption are affecting tax collection , as traditional channels are increasingly losing ground to digital channels. There is no shortage of examples. Amazon, Netflix and Airbnb are some of the best-known companies that are transforming distribution, the dissemination of audiovisual content and the booking of accommodation, respectively.
Share!Start of marked textFind out what situation Spain is in with regard to digital taxation.End of marked text
Tax authorities around the world are closely monitoring all these changes. For example, in Spain, the Tax Agency has already set its sights on holiday rentals, requiring these ghana email list platforms to declare the rentals carried out through them, using Form 179 , an informative declaration with which the Tax Agency intends to control this activity.
In the last investiture debate, the candidate for Prime Minister, Pedro Sánchez, said that he will promote digital taxation , an objective that is also in the focus of the European Union, since the existing taxation and regulatory frameworks are totally outdated and are shown to be inefficient, given the new digital economy that, in most cases, transcends national and even community borders.
Where are taxes on digital activities paid?
The digital economy often results in taxes not being paid in the countries where the economic value is generated, which is why the EU is actively working to adapt Member States' tax systems to the digital age. This mismatch, and the fact that digital companies derive their revenues largely from intangible assets , pose a challenge for tax systems.
The digital economy is leaving the current tax framework behind in several aspects
Digital taxation in the EU
In March 2018, the European Commission adopted two legislative proposals aimed at adapting current tax rules to the digital economy.
The first initiative proposed reforming corporate tax rules so that profits are recorded and taxed where companies have significant interaction with users through digital channels, which is the long-term solution recommended by the Commission.
The second proposal related to the common system of taxing revenues from the provision of certain digital services, or “ digital services tax ” and would be a temporary tax to be introduced and applied by member states and covering certain digital activities generating revenue in the EU.
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Digital taxation beyond EU borders
At the international level, a long-term consensus is also being sought. The United Nations' report on the digital economy states that countries are reconsidering the way tax rights should be distributed to avoid the possibility of major digital platforms being undertaxed in a rapidly evolving digital economy.
According to the report, there is a clear mismatch between where profits are taxed and where and how value is created . Given that developing countries are primarily markets for global digital platforms and that their users contribute significantly to value generation and profits, authorities in these countries should have the right to tax these platforms.