INTERNATIONAL TAXATION OF DIGITAL SERVICES – NECESSITY OR ABUSE?

Abstract

In the 20¬th century, most developed countries taxed and redistributed - either in money or in kind - part of their wealth. This was done by taxing economic activities, either on the production side or on the consumer side. The wave of globalization that emerged after World War II and, more importantly, since the early 1990s, has made it difficult in some countries to tax companies, as tax evasion or tax optimization have become easier. Even in the case of these cross-border activities, as long as most of the sold items came from the traditional brick companies, this was more of an implementation problem than of design. The development of the digital economy on the basis of increasing returns on scale and intangible assets is a more fundamental problem. The purpose of this paper is to analyse the pros and cons of applying the taxation of digital services and goods on economic transactions with these types of services or goods.