Abstract
In the area of taxation of business corporations operating in several different countries, there is a problem arising with he identification of the tax residence of the liable entity. With the expansion of the so-called digital business, where entrepreneurs often do not have a physical headquarters or business units, this problem is becoming more common. Efforts to introduce a digital tax within the Member States of the Organisation for Economic Co-operation and Development and the European Union are accompanied by efforts to address this issue through various legislative acts. This article explains how the problem of identifying tax residence arises, why it is undesirable and describes possible solutions.
Highlights
Taxation of digital business activities has been a topic discussed for several years both by national authorities and at the level of the European Union or Organisation for Economic Co-operation and Development
In the area of taxation of business corporations operating in several different countries, there is a problem arising with the identification of the tax residence of the liable entity
The regulations provide for the following activities, the trading of which is to be subjected to a digital tax: 1. services consisting of the placing of targeted advertising on a digital interface aimed at users of that interface, and related ancillary services
Summary
Taxation of digital business activities has been a topic discussed for several years both by national authorities and at the level of the European Union or Organisation for Economic Co-operation and Development (hereinafter OECD). For the purposes of this paper, this phenomenon of non-existence of real residence will be called tax absence These flexible entrepreneurs travel, work for a Hungarian client in a café in Jakarta or in an alpine chalet (provided a quality internet connection, ). One of them is contributing to various national economies, for example through VAT, using the services of an internet provider and more It makes it easy for him/her to find the country with the most favourable tax regime for its official seat, which again leads to a decrease in the income of the state to which the entrepreneur has a real relationship. We will focus in particular on the actions of the European Union, because its regulation is closer to us by its nature and we will feel its impact rather immediately
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