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The Challenge Of Digital Economy To The International Tax Jurisdiction Of Origin Country And Countermeasure

Posted on:2019-06-02Degree:MasterType:Thesis
Country:ChinaCandidate:B Y LingFull Text:PDF
GTID:2416330596452295Subject:International law
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Before the era of digital economy,e-commerce has attracted the attention of the world and international organizations.The use of Internet and communication technology has made business activities go beyond geographical constraints.With the great progress of Internet and communication technology which further integrate with the business activities of enterprises and Internet technology,intangibility and high liquidity of digital goods makes the business activities of enterprises and traditional tax jurisdiction which is on the basis of the concept of permanent establishment gradually become indistinct.Relying on communication technology,enterprises can easily manage business activities on the global scale,resulting in a new tax planning mode of value chain management,which makes the tax authorities of all countries lack the basis of tax jurisdiction.The digital economy has brought great challenges to the international tax rules,which is a fact recognized by the world at present.Through the analysis of OECD Addressing the Tax Challenges of the Digital Economy 2014 and Addressing the Tax Challenges of the Digital Economy Final Report 2015 is not difficult to see that the revolution of the system of the international tax jurisdiction under the digital economy is still in the exploratory stage.The traditional concept of permanent establishment requires that the enterprise must have a fixed base for business.It focuses on the relationship between the business activities and the country.Faced with the reduction of the dependence on regional conditions and the occasionality of regional selection caused by digital economy,the OECD raised the plan of modifying the exception clauses of permanent institutions and several new jurisdictional basis concepts.Themost notable concern is the new nexus rule of ‘significant digital presence' and‘significant economic presence'.It raises the concept for considering the relationship between the digital economic enterprises and the origin countries.The traditional rule of international tax jurisdiction is developed by the principle of economic allegiance.Facing the impact of the digital economy,we must interpret the principle of economic allegiance in accordance with the requirement of the new era,and re-establish the standard of economic relations between enterprises and their origin countries.The traditional international tax theory held the point that the contribution of the residents in the realization process of value is more than that of the country of origin,but in the era of digital economy,data is the lifeblood of the economy,the country of origin as the market is not only located in the process of realizing the value but also involved in the process of creating the value.Therefore,this paper holds that the revolution of the traditional rules of international tax jurisdiction is inevitable.China has begun to lead the world in the digital economy,not only as a large investor,but also a large consumer.Generally the traditional international tax rules are in favor of the interests of developed countries.Facing this huge change,China should make early response to the digital economy and put forward their demands in the process of reconstruction of international tax rules for maintaining their own tax jurisdiction and preventing the erosion of the tax base.
Keywords/Search Tags:Digital economy, International tax jurisdiction, Economic allegiance, Permanent establishment, Nexus, Significant economic presence
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