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Digital Transformation & Taxation: Opportunities & Challenges
Together with the OECD, European institutions have expressed a renewed interest in creating a Digital Service Tax to make existing taxation systems fit for the digital age. Placing higher taxes on digital corporations, however, may not necessarily be motivated by principles of fair taxation, as it does not take into consideration the richness of the digital enterprise ecosystem. In fact, in an increasingly digitalized economy, where almost all businesses employ digital tools, the creation of an ‘equalization’ tax raises the issue of its scope: what would fall in the scope as business are transforming digitally? As transparency and strict rules already exist across Europe, choosing to place an arbitrary cap would discount their efficiency and enforceability, as applying overgeneralized guidelines would not reflect the complexity of the digital economy.
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