Master of Laws




Professor Colin Campbell


The advent of information technology and digitalization has changed and continues to change everyday life, including the manner in which business operations are carried out. Years back, to run a taxi business, you would need to own vehicles and employ drivers. Today, some digitalized businesses are able to operate the same business by just owning a digital interface and related intellectual property rights. This change in the way things are done has significant impact on traditional legal systems. In the realm of tax law, digitalization has impacted on traditional international tax rules including the threshold for allocating taxing rights. In. this paper, the author presents a broad review of the main current issues regarding allocation of taxing rights, and the different solutions that have been proposed to accommodate digitalization in the international tax system. In terms of structure, this paper shall proceed as follows. Section 1 is the introduction. Section 2 will review the germane aspects of the current PE concept. Section 3 will examine the nature of digitalized business models which are the subjects of international discussions in this area. Section 4 will review the efforts that have been made at the international level at taxing digital businesses, and highlight the critical points of these efforts. The scope of this work will focus on the ongoing discussions regarding direct taxation of the digital economy. Indirect taxation of the digital economy may be referred to when necessary but will not be reviewed in any detail.