Taxing data when the United States disagrees
What is the best way to tax data-driven business models without contravening the existing global quasi-constitutionalist order on tax, trade, and investment law? A number of countries in Europe and around the world have begun imposing standalone digital services taxes pending multilateral agreement...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Cambridge University Press
|
| Series: | European Law Open |
| Subjects: | |
| Online Access: | https://www.cambridge.org/core/product/identifier/S2752613524000493/type/journal_article |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832580039727644672 |
|---|---|
| author | Tarcísio Diniz Magalhães Allison Christians |
| author_facet | Tarcísio Diniz Magalhães Allison Christians |
| author_sort | Tarcísio Diniz Magalhães |
| collection | DOAJ |
| description | What is the best way to tax data-driven business models without contravening the existing global quasi-constitutionalist order on tax, trade, and investment law? A number of countries in Europe and around the world have begun imposing standalone digital services taxes pending multilateral agreement on a coordinated reform of bilateral income tax treaties (aka the OECD-G20/Inclusive Framework’s ‘Pillar 1’). But if Pillar 1 fails to materialise and countries go forward with unilateral digital services taxes, the United States and U.S. firms will likely seek redress using domestic measures as well as trade and investment treaties where applicable. This Article argues that in the face of such U.S. resistance, EU member states and countries elsewhere ought to reconsider using the income tax system to achieve their goals instead. We first review the events that led countries to avoid the income tax in favour of standalone taxes only to become embroiled in domestic U.S. trade policies. We then explain how European and other source jurisdictions for business services related to data collection, mining, and commercialisation could revisit the income tax to get to the same tax base, namely by taking an ambulatory interpretation approach to provisions in existing tax treaties in a way that renders possible to accommodate withholding taxes on those services. We show that an ambulatory interpretation approach could achieve the underlying goals of taxing data-driven businesses, in some cases even without any domestic law or treaty reform, with treaty-based rules for dispute resolution a ready tool to draw upon if and when the United States disagrees. |
| format | Article |
| id | doaj-art-d84d0eaaac014ac1aa5d5ef075d50013 |
| institution | Kabale University |
| issn | 2752-6135 |
| language | English |
| publisher | Cambridge University Press |
| record_format | Article |
| series | European Law Open |
| spelling | doaj-art-d84d0eaaac014ac1aa5d5ef075d500132025-01-30T11:18:18ZengCambridge University PressEuropean Law Open2752-613512310.1017/elo.2024.49Taxing data when the United States disagreesTarcísio Diniz Magalhães0https://orcid.org/0000-0002-6641-448XAllison Christians1https://orcid.org/0000-0001-5331-2575Faculty of Law of the University of Antwerp, Antwerpen, BelgiumFaculty of Law, McGill University, Montreal, CanadaWhat is the best way to tax data-driven business models without contravening the existing global quasi-constitutionalist order on tax, trade, and investment law? A number of countries in Europe and around the world have begun imposing standalone digital services taxes pending multilateral agreement on a coordinated reform of bilateral income tax treaties (aka the OECD-G20/Inclusive Framework’s ‘Pillar 1’). But if Pillar 1 fails to materialise and countries go forward with unilateral digital services taxes, the United States and U.S. firms will likely seek redress using domestic measures as well as trade and investment treaties where applicable. This Article argues that in the face of such U.S. resistance, EU member states and countries elsewhere ought to reconsider using the income tax system to achieve their goals instead. We first review the events that led countries to avoid the income tax in favour of standalone taxes only to become embroiled in domestic U.S. trade policies. We then explain how European and other source jurisdictions for business services related to data collection, mining, and commercialisation could revisit the income tax to get to the same tax base, namely by taking an ambulatory interpretation approach to provisions in existing tax treaties in a way that renders possible to accommodate withholding taxes on those services. We show that an ambulatory interpretation approach could achieve the underlying goals of taxing data-driven businesses, in some cases even without any domestic law or treaty reform, with treaty-based rules for dispute resolution a ready tool to draw upon if and when the United States disagrees.https://www.cambridge.org/core/product/identifier/S2752613524000493/type/journal_articleTax lawtrade lawinvestment lawdata economytreaty interpretation |
| spellingShingle | Tarcísio Diniz Magalhães Allison Christians Taxing data when the United States disagrees European Law Open Tax law trade law investment law data economy treaty interpretation |
| title | Taxing data when the United States disagrees |
| title_full | Taxing data when the United States disagrees |
| title_fullStr | Taxing data when the United States disagrees |
| title_full_unstemmed | Taxing data when the United States disagrees |
| title_short | Taxing data when the United States disagrees |
| title_sort | taxing data when the united states disagrees |
| topic | Tax law trade law investment law data economy treaty interpretation |
| url | https://www.cambridge.org/core/product/identifier/S2752613524000493/type/journal_article |
| work_keys_str_mv | AT tarcisiodinizmagalhaes taxingdatawhentheunitedstatesdisagrees AT allisonchristians taxingdatawhentheunitedstatesdisagrees |