scholarly journals PERMANENT ESTABLISHMENT. THE CRISIS OF THE ARTICLE 5 OECD MC IN THE DIGITAL ECONOMY

2021 ◽  
Vol 180 (3) ◽  
pp. 97-131
Author(s):  
Montserrat Hermosín Álvarez
Keyword(s):  
Business Models ◽  
Digital Economy ◽  
Legal Regime ◽  
Traditional Concept ◽  
Permanent Establishment ◽  
Physical Presence ◽  
The Moment ◽  
Article 5 ◽  
Economic Capacity

The rise of the digital economy, breaking with business models that require a physical presence to develop their activities, has dislodged the traditional concept of permanent establishment set out in Article 5 OECD MC. In the light of the precept’s loopholes, large multinationals have engaged in abusive practices to relocate their profits, thus avoiding contributing in the States where the income is generated in accordance with their economic capacity. In this paper, we examine the concept of permanent establishment included in art. 5 OECD MC, its typology following the BEPS Project’s modifications and the different scenarios that do not constitute a permanent establishment. We also explore whether its legal regime continues to be useful in today’s context or whether, on the contrary, the moment has come to abandon the concept of permanent establishment entirely due to the problems generated by today’s article 5 OECD MC, unable to respond to the challenges posed by the digital economy.

The Concepts of Legal Status of the Permanent Establishment in the Era of Digital Economy

2019 ◽  
pp. 2079-2090
Author(s):  
Karina A. Ponomareva
Keyword(s):  
Comparative Analysis ◽  
Legal Status ◽  
Digital Economy ◽  
Tax Law ◽  
Traditional Concept ◽  
Tax Legislation ◽  
Permanent Establishment ◽  
Physical Presence ◽  
The Subject ◽  
Traditional Approaches

The purpose of the article is to identify the key features of the proposals to modify the concept of permanent establishment in digital economy, as well as their differences from the traditional concept of permanent establishment. The subject of the study is a comparative analysis of the concepts of digital presence, aimed at finding new factors for the distribution of tax revenues between the states in which digital enterprises operate. The development of the digital economy necessitates the revision of traditional approaches to the taxation of permanent establishment in the doctrine of tax law and in tax legislation. The article considers doctrinal approaches to the concept of permanent establishment in the digital economy, as well as the proposals of the OECD and the European Commission. The core of the debate is the question of whether the classical concept of permanent establishment remains a basis for source taxation for multinational digital enterprises. A comparative analysis of international and European practice shows that the concept of permanent establishment is based on the minimum level of presence of a non-resident in the country required for taxation. This is due to the fact that the main feature of the functioning of digital enterprises, important for tax law, is the absence of the need for their physical presence in the state

scholarly journals A New Nexus Based on the Concept of Significant Economic Presence: The Digital Permanent Establishment

2019 ◽  
pp. 377-390
Author(s):  
Soraya Rodríguez Losada
Keyword(s):  
Foreign Market ◽  
Corporate Taxation ◽  
Final Report ◽  
Traditional Concept ◽  
Permanent Establishment ◽  
Physical Presence

The traditional concept of EP status is obsolete and enables digital companies to enter a foreign market jurisdiction without having a minimal physical presence. These companies usually do not reach the threshold required to establish the necessary taxable nexus to attribute the profits to that jurisdiction. For the purpose of realigning corporate taxation with the location of actual business activities, Action 1 Final Report relaunches the debate of a new nexus based on the concept of significant economic presence.

scholarly journals Policy Forum: Promoting Tax Compliance by Regulating the Digital Economy—Quebec's Uber Initiative

2021 ◽  
Vol 69 (2) ◽  
pp. 513-527
Author(s):  
Michaël Robert-Angers ◽  
Luc Godbout
Keyword(s):  
Tax Evasion ◽  
Business Models ◽  
Tax Compliance ◽  
Digital Economy ◽  
Provincial Government ◽  
Business Practices ◽  
Tax Revenues ◽  
Physical Presence ◽  
New Business ◽  
Policy Forum

The development and expansion of the digital economy is changing how companies interact with their customers and suppliers. Digital business models facilitate transactions between individuals and make it easier to conduct business abroad without the need for a physical presence. However, the growing use of such models creates many challenges for tax administrations. In particular, these new business practices call into question the traditional ways of collecting tax revenues, and thus force tax administrations to innovate. In Quebec, the context surrounding the legalization of the operations of the multinational Uber has led to an agreement between the company and the provincial government providing that Uber will carry out, on behalf of the drivers using its platform, tax compliance activities that employers would normally perform. Specifically, Uber now pays the sales tax applicable to drivers' transactions directly to Revenu Québec. This arrangement helps to protect commodity tax revenues in an economic sector where tax evasion is prevalent.

scholarly journals Contemporary Competition: Process or Result?

2021 ◽  
Vol 65 (8) ◽  
pp. 5-13
Author(s):  
N. Rozanova
Keyword(s):  
Product Differentiation ◽  
Business Models ◽  
Digital Economy ◽  
Linear Process ◽  
Successful Implementation ◽  
Business Practices ◽  
Competitive Pressure ◽  
Relevant Market ◽  
Traditional Concept ◽  
Circular Model

Digital economy has significantly changed business reality. The radical transformations are ubiquitous. New patterns feature economic behaviour of market participants, their interactions, their business models and their market activities. What about competition? What forms of competitive conduct have lost importance in contemporary digital economy? And what are the newest strategies that enhance competitiveness of the firms? Which digital business practices could limit competition? And which of them could stimulate business rivalry? Digitalization has changed many, in not all, of our traditional conceptual visions in the area of competition, market, market power, relevant market actors. The nature of competition itself is under scrupulous investigation. What conclusions could we draw from current theoretical and empirical analyses of competition mechanism? First of all, we deal with new forms of competition. The old Schumpeterian question – whether competition is a creative innovative destruction or it leads only to unfair elimination of competitors from the market – has arisen again nowadays. Online competition has two radically different outcomes. On the one hand, lower transaction costs, more possibilities to compare prices and assortment, expanding markets beyond geographical limits, low entry barriers reinforce rivalry. On the other hand, online activity of the firms can mitigate competitive pressure though new forms of product differentiation and usage of phantom strategies, phantom products, phantom plans. In order to increase their overall competitiveness, firms have elaborated an O2O (online-to-offline) business model that is allowed to utilize virtual and actual activity at the same time. Restaurant business, cosmetic industry, taxi deals are examples of its successful implementation. Is more competition better for consumers? This concept has been considered doubtful. Digital competitive pressure has led to a novel format of product differentiation, that is, targeted product design. Unlike traditional view in line with Salop circular model, contemporary firms choose product strategies that target as little individuals as possible. The less the circle of potential clients is, the less their price elasticity would be, and the weaker price rivalry might become. Traditional concept views competition as a Markov stochastic process. Contemporary analyses demonstrate more complicated nature of competitive mechanism. Online and offline innovations transform competition into non-linear process with “humps and jumps”, the outcomes of which are not always in the interests of consumers’ welfare.

Influence of social networks on business processes’ development

2020 ◽  
Vol 19 (12) ◽  
pp. 2225-2252
Author(s):  
E.V. Popov ◽  
V.L. Simonova ◽  
O.V. Komarova ◽  
S.S. Kaigorodova
Keyword(s):  
Social Networks ◽  
Social Media ◽  
Business Models ◽  
Business Processes ◽  
Digital Economy ◽  
Theoretical Understanding ◽  
Sales Channels ◽  
A Value ◽  
The Impact

Subject. The emergence of new ways of interaction between sellers and buyers, the formation of new sales channels and product promotion based on the use of digital economy tools is at the heart of improving the business processes. Social networks became a tool for development; their rapid growth necessitates theoretical understanding and identification of potential application in enterprise's business process digitalization. Objectives. We explore the role of social media in the digitalization of business processes, systematize the impact of social networks on business processes of enterprises in the digital economy. Methods. The theoretical and methodological analysis of social networks as a tool for digitalization of company's business processes rests on the content analysis of domestic and foreign scientific studies, comparison, generalization and systematization. Results. We highlight the key effects of the impact of social networks on the business processes of the company; show that the digitalization of business processes should be considered in the context of a value-based approach, aimed at creating a value through the algorithmization of company operations. We determine that social networks are one of the most important tools for digitalization of company's business processes, as they have a high organizational and management potential. We also systematize the effects of social media on company's business processes. Conclusions. We present theoretical provisions of the impact of social networks on business processes of enterprises, which will enable to model and organize ideas about the development of digital ecosystems and the formation of business models.

DIGITAL ECONOMY AND GLOBALIZATION: THE IMPORTANCE OF DIGITAL ENTREPRENEURSHIP DEVELOPMENT

2020 ◽  
Vol 6 (3) ◽  
pp. 17-20
Author(s):  
Farxod Tursunov ◽  
Keyword(s):  
Business Models ◽  
Digital Economy ◽  
Management Systems ◽  
Entrepreneurship Development ◽  
New Business ◽  
Definition Of ◽  
Digital Enterprise ◽  
New Business Models ◽  
Digital Entrepreneurship

The article discusses the role of the digital economy in the development of the country, how it becomes the basis of the economy, new business models and management systems. The opinion of scientistsis analyzed, a definition of a digital enterprise is given

Civil Wars as Challenges to the Modern International System

Daedalus ◽  
2017 ◽  
Vol 146 (4) ◽  
pp. 112-125
Author(s):  
Hendrik Spruyt
Keyword(s):  
Civil Wars ◽  
International System ◽  
Self Determination ◽  
Legal Regime ◽  
Civil Conflicts ◽  
Policy Responses ◽  
Reasonable Solution ◽  
The Moment ◽  
Lock In ◽  
External Intervention

The current international system is based on Westphalian principles in which authority is defined territorially. Within this territory, the state has sole jurisdiction. Adherence to these principles has contributed to the decline of interstate war. Conversely, applying these principles and correlated norms to states that gained their independence after 1945 has contributed to civil conflicts. These norms are opaque, as is the case with the principle of self-determination; or they lock in an unstable status quo, as with uti possidetis, the principle that borders inherited at the moment of independence should always be maintained; or they are inconsistently applied and often violated, as with the principle of noninterference. Consequently, they provide poor guidelines as to when, and on which grounds, external intervention in civil wars might be warranted. I argue that the degree to which the combatants challenge Westphalian principles should guide policy responses. Furthermore, the international legal regime should reconsider uti possidetis. In some instances, partition might be a reasonable solution to civil wars.

scholarly journals TAXING DIGITAL ADVERTISING: A PROPOSAL TO INDONESIA

Scientax ◽  
2021 ◽  
Vol 3 (1) ◽  
pp. 1-28
Author(s):  
Galih Ardin
Keyword(s):  
Southeast Asia ◽  
Oecd Countries ◽  
Digital Economy ◽  
Tax Revenue ◽  
Indonesian Government ◽  
Cross Border ◽  
Permanent Establishment ◽  
The World ◽  
New Challenges ◽  
Taxation System

Tax on digital economy activities has become a widely discussed issue in the world because of the limitation on the permanent establishment concept in anticipating the digital economy's externalities. The failure of OECD countries to reach digital economic taxation agreements also caused these countries to take unilateral measures in securing their respective interests. Indonesia, as a country with considerable digital economy value in the Southeast Asia region, plans to implement the significant economic presence concept to secure its tax revenue that cannot be captured by PE concept in the digital cross-border transaction. However, the implementation of this new nexus could generate new challenges in the Indonesia taxation system. This study seeks to provide alternatives to the Indonesian government regarding the taxable presence and taxation methods on the digital economy, especially digital advertising, by conducting examination and evaluation through current nexuses, the international proposals, and other countries' experience in addressing tax challenges in the digital advertising.

scholarly journals Unpacking Privacy: Willingness to pay to protect personal data

2019 ◽  
Author(s):  
Anya Skatova ◽  
Rebecca Louise McDonald ◽  
Sinong Ma ◽  
Carsten Maple
Keyword(s):  
Business Models ◽  
Personal Data ◽  
Digital Economy ◽  
Privacy Preferences ◽  
Individual Privacy ◽  
Free Service ◽  
Different Types ◽  
The Government ◽  
Evaluation Techniques ◽  
Future Business

Data is key for the digital economy, underpinning business models and service provision, and a lot of these valuable datasets are personal in nature. Information about individual behaviour is collected regularly by organisations. This information has value to businesses, the government and third parties. It is not clear what value this personal data has to consumers themselves. Much of the digital economy is predicated on people sharing personal data, however if individuals value their privacy, they may choose to withhold this data unless the perceived benefits of sharing outweigh the perceived value of keeping the data private. Further, they might be willing to pay for an otherwise free service if paying allowed them to avoid sharing personal data. We used five evaluation techniques to study preferences for protecting personal data online and found that consumers assign a positive value to keeping a variety of types of personal data private. We show that participants are prepared to pay different amounts to protect different types of data, suggesting there is no simple function to assign monetary value that can be identified for individual privacy in the digital economy. The majority of participants displayed remarkable consistency in their rankings of the importance of different types of data, a finding that indicates the existence of stable individual privacy preferences in protecting personal data. We discuss our findings in the context of research on the value of privacy and privacy preferences, and in terms of implications for future business models and consumer protection.

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