International Taxation Challenges In The Digital Economy

Learning Objectives

• To explore how the digital economy and digital economy business models work
• To identify how digital Companies share key features such as scale without mass, a heavy reliance on intangibles, data, and network effects
• To recognize the difference between digital and physical nexus
• To explore the fifteen (15) BEPS articles, especially Article 1 on the Digital economy
• To recall the Unified Approach to taxing the Digital economy: Pillar One and Two
• To explore the new taxing right under Pillar One.
• To describe the new Global minimum tax under Pillar Two.
• To explore how Pillar One erodes the Arm's Length Standard as the basis for International Taxation
• To identify the prevention of aggressive unilateral measures and the intense political pressure to tax highly digitalized Multi-national businesses
• To explore what the future of multilateral tax co-operation will look like

Course Description

The Organization for Economic Cooperation and Development (OECD) finalized the Base erosion and profit shifting (BEPS) initiative in 2015. BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profits ‘disappear’ for tax purposes or to shift profits to locations where there is little or no real activity but the taxes are low, resulting in little or no overall corporate tax paid.

At the center of the current tax, the debate is whether international income tax rules, developed in a "brick-and-mortar" economic environment more than a century ago, remain applicable, and fit for purpose, in the modern global, digital economy. The fundamental elements of the global tax system which determined where taxes should be paid ("nexus" rules based on physical presence) and what portion of profits should be taxed ("profit allocation" rules based on the arm's length principle) have served their purpose well for many years. Namely, they have enshrined tax certainty, helped to eliminate double taxation, and stimulated global trade.

However, the International Tax standard for nearly 100 hundred years, the Arm’s Length Principle, is under intense scrutiny in the highly digitized business environment. The OECD has proposed new rules relying on ‘digital’ nexus and formulary apportionment to meet BEPS challenges in the Digital economy.

Major topics covered:

• Nature of Digital Economy
• Digital Nexus 
• Digital Service Taxes
• The OECD Unified Approach
• OECD Pillar One and Pillar Two
• Arm’s Length Standard vs. Formulary Apportionment 
• Mutual Agreement Procedure and Multi-lateral Convention

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Note:- William Seegar moved on from this world. With sadness in our hearts, we find solace in knowing that he’s in a better place. This is a recorded webinar of his live webinar. For any queries please contact us at support@my-cpe.com

Overview

• Overview

  7 mins
• Key Concepts

  11 mins
• what is the Digital Economy?

  21 mins
• Where do we come from?

  29 mins
• From the Economist

  51 mins