Digital Taxation Monitor now on our Tax Research Platform (TRP)
We have recently created the Digital Taxation Monitor covering the taxation of digitalized economy. It will initially comprise of 60 country tables regarding current unilateral measures and VAT measures per country. It also covers the supranational discussions and measures adopted by the OECD, EU and UN. It follows-up on the current worldwide debate and possible agreement on the tax treatment of digitalized businesses and it will monitor the implementation per country of an eventual global solution.
In one overview, you can easily compare measures by country, organization or tax type, with detailed comments on the important aspects of (direct and indirect) taxes targeting the digitalized economy. The monitor covers essentials such as taxpayers, taxable base, tax rates, method of collection, registration requirements and other compliance obligations. But it also includes the country context (such as the country position on the global discussion and status of US investigations on the country’s digital tax). Links to country and topical analyses, laws and to journal articles provide you with further information on jurisdictions to support your research and business decisions.
The Digital Taxation Monitor supports your research and business decisions by providing the following benefits:
- Comprehensive: helps keeping track of the variety of taxes out there that apply to the digitalized economy!
- Regular updates: get the latest news ensuring you do not miss out on anything that could present an issue in a country you are dealing with.
- Anticipate: helps you to decide on how best to structure your company such as changing the way you do business to keep control or revise your business entity structure.
- Compliance: are countries implementing measures that you need to report?
- Enhance your understanding: what definitions are used and what is the reasoning behind certain digital taxes? Whom might they affect, what are the exceptions and are there intercompany aspects to consider?
- Compare: quick side-by-side comparisons or export functionality enabling you to group countries that have indirect tax obligations or to extract withholding taxation measures across the globe from this and other IBFD tables.
The following examples, based on the Digital Taxation Monitor, helps you understand how each country is moving forward in what concerns the taxation of digitalized economy.
Let’s say you are a tax manager at a multinational enterprise with its headquarters in the United States. The enterprise provides digital services and sells goods through online platforms directly to customers in Brazil, France, India, Italy, Japan, Kenya and Mexico. As a tax director, you are aware of the discussions concerning the taxation of the digitalized economy and that some countries have been implementing specific measures and taxes targeting transactions carried out via digital channels. You want to ascertain if this is the case for the countries with which your enterprise maintains online business.
You are particularly interested in having information on the implementation of taxes in your market countries that may affect your enterprise, such as digital service taxes in France and Kenya or the equalization levy in India, new taxable presence risks such as in the case of a significant economic presence in Italy, and special VAT/GST collection mechanisms and compliance obligations for e-commerce, such as the ones in the new EU VAT e-commerce package, effective since 1 July 2021 in EU Member States you maintain online businesses with. You also want to keep track of the developments concerning the US investigations into some digital taxes, the discussions on a global solution and its eventual implementation by your market countries. The Digital Taxation Monitor gives you an overview of the proposed and implemented measures targeting the digitalized economy and the follow-up of the global solution debate and its implementation per country.
For your main concerns with taxation of income or revenue derived by the enterprise from its online business directly with customers in the market countries, Section A of the Digital Taxation Monitor provides you with information on the taxes proposed or implemented in the country, including digital service taxes, withholding taxes, equalization levy or taxation of significant economic presence.
Indirect Tax and other types of taxes
In Section B, you get information on the VAT/GST measures concerning B2B and B2C e-commerce transactions carried out with the market countries of the enterprise, including applicable compliance obligations and registration requirements. If the market country proposed or applies other types of taxes or contributions to digital transactions, such as in the case of digital contributions proposals currently considered in one of your market countries, i.e. Brazil, you will find this under Section C of the table.
The Digital Taxation Monitor gives you the possibility to see the information of different countries side-by-side, through a comparison tool. In this case, you will be able to compare the tax information of your market countries and identify, for example, those with the highest and lowest tax and compliance burden affecting online businesses.
Updates on a global solution
You are interested not only in the tax technical information of the specific taxes, but also in the context and future of the taxation of the digitalized economy in those market countries. The monitor provides you with additional information on the position of the countries in the current discussions on a possible global solution (for example, the latest G7 agreement signed by two of your market countries, i.e. Italy and Japan) as well as the status of US investigations conducted into taxes implemented by some of your market countries (Brazil, India and Italy). You will also be able to follow up the eventual global solution on the matter by checking the information in the Digital Taxation Monitor table for the OECD and how this solution will be implemented by each of your market countries, including the phasing-out of their unilateral measures.
Finally, if you wish to dive deeper, the Digital Taxation Monitor is also interlinked with other collections available on IBFD’s Tax Research Platform, such as country tax guides, Tax News Service (TNS) reports, primary source materials and many journal articles.