Research On The Perfection Of Principles Of Permanent Establishment Under The Digital Economy Environment

With the development of economic globalization,many companies have accelerated their overseas developments in order to obtain transnational operating profits.For transnational operating profits,the country of residence of the enterprise may be taxed on the basis of the resident's tax jurisdiction,and the source country of the profit may also tax the income generated in its territory on the basis of the tax jurisdiction of the source of income.In this case,there will be double taxation for this part of the transnational business income.Therefore,the international community generally uses the principle of permanent establishment to solve such problems.It can ensure that the taxation power of the source country is not deprived,and it can also restrain double taxation to some extent.However,in the past few years,with the advancement of information and communication technologies,the digital economy has become an important part of the global economy.The rise of the digital economy has led to the emergence of new business models,some characteristics of the digital economy and its new business model(eg,Data dependence,mobility,etc.have had a significant impact on the traditional principle of permanent establishments.For example,digitized products such as intangible assets represented by data are difficult to apply to traditional differentiation of the nature of transactions and the form of transaction activity.The tax rules of the acquired nature,these digital products and other traditional tangible goods have changed their existing forms through ICT technology.They have typical virtualization features.They can complete transactions without having offline physical business sites,and service providers can often provide services.With ICTtechnology to achieve online services,and so on.In response to these effects of the digital economy on traditional permanent establishments,the international community has conducted a series of discussions,such as proposing new concepts and theories such as virtual standing institutions and significant economic existence.The OECD has also targeted taxation on related issues.The model of the agreement has been modified adaptively,such as limiting the activities of preparation or auxiliary nature,introducing anti-segmentation clauses,etc.The decision of the Tokyo District Court in Japan for a case identified as a permanent establishment in the offline warehouse case more typically reflects the relevant attitudes of the international community in the near future.This article,based on the case's circumstances,analyzed the court's judgment and analyzed the new version with the help of the case.Tax treaty model related content and the possibility of significant economic existence concept.Although China is already an indispensable nucleus for world economic development,compared with developed countries such as Europe and the United States,the development of China's digital economy is still relatively young,and the research on the taxation of the digital economy and the pace of legislation are also lagging behind..As one of the important rules for the signing of international tax treaties by China,the principle of permanent establishment plays a crucial role in the tax collection and management of China.How to apply the principle of permanent establishment in the context of digital economy is particularly important.Although China has signed a certain number of bilateral tax treaties with foreign countries and the bilateral tax treaties also stipulate the issue of permanent establishments,the principles of China's existing permanent establishments still have problems such as incomplete laws and regulations,low convergence,and so on.In the digital economy environment,the principle of permanent establishment is proposed and measures including rational extension of permanent establishments are proposed.