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Study On The Identification Of Permanent Establishment Under The Digital Economic Environment

Posted on:2020-12-21Degree:MasterType:Thesis
Country:ChinaCandidate:L J YeFull Text:PDF
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In the context of the rapid development of the digital economy,countries around the world cannot completely exclude the application of the standard of traditional permanent establishment,but they should realize that if they continue to use the standard of traditional permanent establishment,in this era of rapid development of science and technology and economy,the world trade and the tax interests of all countries will get into troubles.In response,Model Convention for the Avoidance of Double Taxation with Respect to Taxes on Income and on Capital by Organization for Economic Co-operation and Development(OECD)proposes a series of concrete measures to address the challenges posed by the standard of traditional permanent establishment.Setting up virtual permanent organization standard is one of the specific measures.This paper argues that the standard of traditional permanent establishment have been recognized and is still in use today,although they have made great contributions to the taxation of cross-border trade,and have been widely recognized by the international community,due to the emergence of various digital means in the digital economy environment,enterprises engaged in international trade can "stay at home"to control transactions in other countries remotely,and smoothly carry out various economic activities.Due to the lack of permanent establishment,the source countries have lost its important basis for exercising the right to levy taxes on these enterprises according to the source tax jurisdiction,which has greatly damaged the tax interests of these countries.Therefore,the revision of the standard of traditional permanent institutions is of great significance to the source countries.However,the emergence and development of digital economy does not mean the disappearance of traditional economy.In fact,this is a era of digital economy and traditional economy coexist.If only because the emergence of the digital economy and development,the standard of traditional permanent establishment gets into trouble and cannot be fully compatible with digital economy environment,it is considered that the traditional permanent establishment standard has lost the significance,deciding to use a new set of standard,such as bit tax,or cite standard from other fields,such as withholding tax,which may not be comprehensive and appropriate.Therefore,this article accepts that setting up the virtual permanent establishment standard as one of identification standard of permanent establishment instead of eliminating it,so that the principle of permanent establishment can be applied to both traditional and digital economic forms of transnational trade activities.
Keywords/Search Tags:Permanent Establishment, Virtual Permanent Establishment, Digital Economy
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