TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

How can we tax the digital economy?

  • Arnaldo Purba
    Arnaldo Purba

    Works for the Directorate General of Taxation of Indonesia

PREMIUM
Jakarta   /   Wed, September 4, 2019   /  11:34 am
How can we tax the digital economy? The first measure proposed is “to address the tax challenges of the digital economy”. The key challenge to digital economy taxation is that a business can be run in a jurisdiction without being physically present in that jurisdiction. (The Jakarta Post/Seto Wardhana)

Taxation of the digital economy is a widely discussed topic following a report published by the Organization for Economic Cooperation and Development (OECD) in 2013 with a mandate from the Group of 20 countries. In the report titled Action Plan on Base Erosion and Profit Shifting, the OECD lists 15 measures to combat cross-border tax avoidance by multinational corporations. The project has since become known as the OECD/G20 Base Erosion and Profit Shifting Project (BEPS project). The first measure proposed is “to address the tax challenges of the digital economy”. The key challenge to digital economy taxation is that a business can be run in a jurisdiction without being physically present in that jurisdiction. Yet, the existing tax rules govern that a jurisdiction has the right to tax income derived by the business only if the business is physically present. The BEPS...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.