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The question of how to tax multinational companies that operate highly digitalised business models is one of the most contested areas of international taxation. The tax paid in the jurisdictions in which these companies operate has not kept pace with their immense growth and the OECD has proposed a new international tax compromise that will allocate taxing rights to market jurisdictions and remove the need to have a physical presence in the taxing jurisdictions in order to sustain taxability. In this work, Craig Elliffe explains the problems with the existing international tax system and its inability to respond to challenges posed by digitalised companies. In addition to looking at how the new international tax rules will work, Elliffe assesses their likely effectiveness and highlights features that are likely to endure in the next waves of international tax reform.
List of contents
Part I: 1. Taxing cross-border business income; 2. The development of digital business; 3. Challenges to the tax system posed by the digitalisation of business; 4. Responding to the challenges: legal constraints on any changes to the current framework; Part II: 5. The OECD secretariat's and inclusive framework's proposals for multilateral reforms; 6. Examining the proposals for multilateral reforms; 7. Implementing the proposals for multilateral reforms; 8. The influence of alternative policy strategies on the 2020s compromise; 9. Interim solutions and long term reforms; Index.
About the author
Craig Elliffe is a Professor of Taxation Law at the University of Auckland. Prior to becoming an academic, he spent twenty-three years as a tax partner for major international legal and accounting partnerships. He was the first New Zealander to be appointed to the Permanent Scientific Committee of the International Fiscal Association and a member of the New Zealand government's 2018/2019 Tax Working Group. His book International and Cross-Border Taxation in New Zealand won international plaudits and the JF Northey prize for the best legal book published in New Zealand in 2015.
Summary
In dealing with digital companies, the international tax world is at a crossroads: reform will either involve unilateral country-by-country digital services taxes, or a consensus-driven multilateral new 2020s compromise developed by the OECD. This book provides a comprehensive analysis of the effectiveness of the OECD's proposed reforms.
