Multilateral Cooperation in Tax Law

S. 3761. Digital Economy Taxation: Recognized Tax Challenges

1.1. The Evolution of the Digital Economy Taxation

The term “digital taxation” is now commonly used in academic literature to refer to a broad phenomenon for which borders are still uncertain and ambiguous. To a certain extent, it refers to tax rules and policies addressing corporations (particularly multinational enterprises) conducting business on the Internet. Since the end of the 1990s, digital taxation has been on the policy agenda of numerous states and international organizations.

A digital infrastructure, such as the Internet, was viewed as a type of developed communication tool that would eventually facilitate corporate relationships, information sharing, and data interchange.

However, the Internet is truly a “game changer” and changed the way companies conduct business. It was no longer necessary to have a physical place of business in a country to sell products or services in that country. Internet sales grew, and many companies used the internet as one of their sales mechanisms.

As a result, the issue of whether the mere use of computer equipment (e.g. a computer server) located in a country through which e-commerce acti...