Taxation of businesses operating digitally in the European Union

Abstract

Over time the ways businesses operate and are able to reach their customers, have changed significantly. There is no more a need for a business to be physically present in the jurisdiction where their customers are located in, and, on the other hand, there is even no need for the customer to leave their home in order to be able to reach certain goods and services, as they can do it from anywhere unless they have access to the Internet. However, this shift has enabled particular challenges to take place regarding the taxation of the businesses that do conduct their operations digitally. As there is no longer a clear distinction between the jurisdictions where the profits have been generated, it has become complex to determine how to properly tax such businesses. For this reason, both the EU and OECD/G20 have addressed this issue and proposed solutions in order to reach taxation of digitally operating businesses to be more fair and efficient. The thesis provides an in-depth analysis to ways on how the EU, the OECD/G20 and EU Member States have participated and what measures have been implemented in order to reach fair taxation of the digital economy.