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Cloud Legal Project

Corporate income tax implications of the digitalised economy

Phone screen with the Amazon logo

This research is led by Vassiliki Koukoulioti and Chris Reed

This research project investigates whether in a digitalised economy, where mobility, intangibility, reliance on data, user participation and multi-sided business models have transformed the “where” and “how” of value creation, the current international tax principles are efficient and adequate in guaranteeing the fair allocation of taxing rights between the various states or they should be reformulated, or even radically redesigned. In particular, the residence-source principle and the permanent establishment concept are revisited and tested through the comparative examination of the common features of various digitalised business models (e.g. cloud computing, online advertising, online retailer, etc.) and new allocation rules are considered designed in a way to respect the principles of fairness and equity. In this context, the role of users and their data is investigated in terms of their contribution in value creation and their consideration as elements that could create a tax nexus in the market where users are located.

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