The nascent digital economy has revolutionized the global order of businesses by breaking down traditional barriers of international trade and creating platforms for the seamless interaction of buyers and sellers. The growth of this economy has generated billions for multinationals who have leveraged on web-based platforms to provide services and goods in remote jurisdictions.
Last year, Alibaba generated $38 billion within twenty-four hours on its traditional Single’s Day. When the clock struck midnight, it’s reported that Alibaba sold $ 1 billion worth of goods within a span of 68 seconds. The record-breaking sales demonstrate the power of the internet and commerce globalization sparking a tax gold-rush for tax administrators to rope in big digital players to their jurisdictional tax.
However, taxing the digital economy has not been easy. It was noted as one of the main concerns of the Base Erosion and Profit Shifting (BEPS) Action Plan issued by the OECD which latter led to the publication of the 2015 BEPS Action 1 Report on Addressing the Tax Challenges of Digital Economy. The report detailed how digitalization had exacerbated the BEPS issues while explaining the challenges of allocating taxing rights on profits earned from multinational cross-border activities.
09th May 2024
09th May 2024
13th Mar 2024