The digital economy has revolutionized the way of doing business, but it poses challenges to the effectiveness of current international tax system. The OECD has called on the international community to consider new international tax rules for taxing the digital economy, with a plan to reach consensus by 2020. This article highlights that the feasibility of the new rules should be based on a principled approach. However, before international consensus could be reached, some countries started adopting unilateral measures that threaten the integrity of the international tax system, and they impact on foreign direct investment in developing countries. The article highlights the pros and cons of the proposals from a principled and developing country perspective. With country interests to protect, there is no guarantee that consensus will be reached soon. While uncertainty prevails, the article recommends measures that have historically been used to protect source tax bases and are in line with international tax principles that will be useful for developing countries.

The rapid development of the digital economy has brought new challenges to global tax administration, and traditional tax systems are facing numerous difficulties. As an important part of global tax reform, the "two-pillar solution" is of great significance in addressing tax issues in the digital economy. This paper first provides a brief overview of the two-pillar solution and its main contents. It then examines the issue of tax certainty in the digital economy, analyzes the importance of tax certainty for the digital economy, and the challenges it faces. Subsequently, policy recommendations are presented to address tax certainty issues in the digital economy, including international cooperation and coordination, improving tax data collection and information exchange, and promoting self-regulation and compliance in the digital economy. Finally, by analyzing the example of the EU digital tax proposal and the progress and implementation of international tax reform, the paper summarizes the importance of tax certainty in the digital economy, the prospects and challenges of the two-pillar solution, policy recommendations, and future prospects. This paper aims to provide ideas and references for researching tax issues in the digital economy and its solutions, in order to promote the reform and upgrading of the global tax system.

Over the past several years, there have been a series of proposals to replace the U.S. income tax. The 1996 presidential primaries saw one major candidate, Steve Forbes, espouse the virtues of a tax. Another candidate, Senator Richard Lugar, favored a national retail sales tax. A year earlier, Senators Nunn and Domenici introduced their Unlimited Savings Account tax. Each of these proposals involves substituting a consumption-based for the current income tax. Proponents of fundamental reform generally hope that shifting to a consumption base will bring about increased savings and invest­ment and will simplify compliance and enforcement. Except for an occasional obligatory bow to the assertedly positive effects of these reforms on U.S. competitiveness, the public debate about reform rarely addresses international implications of the reform proposals. Yet these proposals would dramatically alter the international as well as the domestic landscape. Moreover, the open nature of the U.S. economy would fundamentally affect any impact of the reform. This paper evaluates selected international aspects of three leading fundamental reform proposals; the Schaefer-Tauzin-Chrysler national retail sales tax, the Nunn-Domenici Unlimited Savings Account (the USA tax), and the Armey-Shelby flat tax (the Flat Tax). A threshold problem is simply to understand how these three proposals work, both as taxes generally and with respect to cross­border transactions in particular. In to understand the effects of each of the three proposals, Part II begins with a discussion of consump­tion as a base and the usual approaches to taxing consumption at the business or personal level, as well as the usual approach to determining the geographic reach of the tax. Each of the three proposals is then described, with particular reference to its treatment of cross-border activity. Part III considers decisions made in the proposals to on a desti­nation or origin basis, and compares the forms of consumption taxes proposed to the standard credit-invoice method value-added (VAT') adopted by most other developed countries. The differences between these three proposals and the internationally accepted credit­ invoice method VAT have ramifications affecting interaction with the VA Ts of other countries. Part III also evaluates differences in the approaches taken under the three reform proposals with respect to the GATT rules proscribing export subsidies for sales of goods, as well as the advantages and disadvantages of origin- or destination-based taxes. Part IV discusses the problems associated with consumption taxa­tion of cross-border services generally, as well as taxation of financial services. This discussion identifies some of the practical problems of a consumption in an international environment. Part V considers the international implications of replacing the fed­eral income tax, including in particular the interaction of a reformed U.S. system with other countries' systems. In this section, and throughout the paper, it must be remembered that we are examining a consumption tax, not an income tax. Thus, the principal implications of Part V relate to the proposals' expressed objective that the United States have no income tax. The resulting mix of income and consumption taxes (i.e., all consumption and no income taxes) would be different from that of any other major developed country. We also consider the implications of such a dramatic change in the international landscape for and likely first order responses by U.S. and foreign investors and foreign governments. The principal objective of this paper is to explain and to help the reader achieve some understanding of the three reform proposals as they would apply to international transactions. Where possible, the pro­posals are evaluated using the policy criteria of impact on economic efficiency, equity in distribution of burden, and the administrative burden of compliance with and enforcement of the tax. 5 As lawyers, not economists, any economic observations are based on our attempts to understand and apply the relevant economic principles. Finally, the proposals are discussed as they have been proposed. There is no attempt to evaluate the likelihood of modifications to the proposals, or to predict the ultimate shape of any consumption regime which might be adopted.

The goal of this research is to develop policy proposals for a reform of Russian corporate income tax legislation. The paper reviews and analyses international and Russian tax policy context and ongoing reforms that aim to address the challenges of the digital economy. It is shown that different states have been implementing unilateral measures in their respective tax legislation due to the absence of global consensus about coordinated reform. This leads to increasing complexity and uncertainty for digital businesses and tax administrations. Considering that the digital tax reform agenda is highly relevant for Russia for fiscal reasons, several ideas for developing Russian tax rules in this context are proposed, including amendments to the concept of corporate residence, introducing a digital services tax as an interim measure, amending the mechanism of withholding tax on royalties and clarifying the tax characterisation of supplies in digital form. This article was prepared as part of research by state assignment at the Russian Academy of National Economy and Public Administration

Recent contributions to the theory of optimal taxation have shared a concern with the design of a tax structure de novo. In this paper, an attempt is made to use optimal tax theory as a framework for evaluating proposed changes in an existing tax system. Using data for the United States from 1967, five different tax reform proposals are examined on the basis of their impact on an explicit social welfare function.

The current controversy surrounding President Obama’s international tax proposals seems like an opportune moment to try to consider them in context. How do these proposals fit in with an agenda for US corporate and international tax reform? Few observers doubt that such reforms are sorely needed, for several reasons. First, the long-term budgetary outlook is unsustainable. Second, the US corporate tax rate is among the highest in the OECD. Third, the current system raises relatively little revenue and large amounts of corporate income go untaxed. Finally, the system is horrendously convoluted and imposes high transaction costs. This paper will attempt to raise some proposals for US corporate and international tax reform. It will begin by asking why we need to tax corporations at all, since the rationale for the corporate tax is important for assessing reform proposals. It will then discuss options for corporate and international tax reform, beginning with long-term options (a 10 year horizon), continuing with the medium term (2-5 years) and concluding with short-term options like the Obama proposals (1-2 years).

Orientation: Because of the digital economy, taxpayers have access to new income streams. These virtual transactions have taxation consequences, and therefore taxpayers need specialised taxation knowledge to understand their tax obligations and act in a tax compliant manner.Research purpose: The aim of this article was to identify the unique tax knowledge requirements for individuals functioning in the digital economy by systematically reviewing literature on the tax challenges arising from this new economy. Applying a conceptual framework of tax knowledge, these knowledge requirements were categorised as either general, procedural or legal. By identifying these requirements, it was possible to point out the risks within these categories that may cause obstacles to individuals to act fully tax compliant.Motivation for the study: Understanding the different knowledge requirements of taxpayers may assist tax authorities to identify the tax compliance risks of these taxpayers in their capacity as individuals functioning in the digital economy.Research approach/design and method: A qualitative approach was used in the study through a thematic search of appropriate literature such as articles, reports, blogs and media releases. These documents were systematically reviewed to identify the knowledge requirements for individual taxpayers functioning in the digital economy.Main findings: The findings suggest that there are specific tax knowledge requirements in different areas that must be in place to ensure tax compliance in the digital economy. Any shortcomings in these areas of knowledge create the risk of non-compliance for individuals functioning in the digital economy.Practical/managerial implications: Taxpayers and tax authorities alike should take note of the risk areas identified in each area of knowledge (general, procedural and legal) and devise strategies to deal with taxation issues arising from transactions in the digital economy.Contribution/value-add: This study applied a tax knowledge framework and identified the general, procedural and legal tax knowledge requirements of individuals functioning in the digital economy. The study also pointed out associated compliance risks, which may assist tax authorities to target strategies for improving taxpayer knowledge in these three areas.

(1972). Tax Reform in the Gay Nineties: Davidson’s Proposals. Journal of Economic Issues: Vol. 6, No. 2-3, pp. 39-60.

Digital technology allows businesses to operate in a country without a physical presence, which poses challenges for traditional taxation. The digital debate focuses on direct taxation and the creation of new taxing rights arising from the tax claims of market jurisdictions on income obtained by foreign digital suppliers conducting business therein without any physical presence. Tax Theory Applied to the Digital Economy analyzes the tax-disruptive aspects of digital business models and reviews current tax initiatives in light of traditional tax theory principles. The analysis concludes that market countries’ tax claims are unsubstantiated and contravene the most basic foundations of tax theory, giving rise to a series of legal, economic, tax policy, and tax administration issues that policy makers cannot overlook. The authors propose establishing a digital data tax (DDT) that is a license-type consumption tax, rather than an income tax, on the international supply of Internet bandwidth to access digital markets. The DDT can be applied either globally or unilaterally, and could become a significant source of tax revenues for market jurisdictions. It is aligned with tax principles and it does not conflict with other tax initiatives: the DDT taxes foreign digital companies as consumers, while income tax proposals tax them as suppliers. The authors also propose creating a new global Internet tax agency (GITA) under the auspices of the United Nations that would provide a neutral forum for political discussion and technical assistance in the area of digital taxation. The digital economy is a global phenomenon that requires a global solution: the creation of global taxing mechanisms and global institutions that provide technical assistance and support for successful global implementation. The book explains difficult technical concepts in plain language and contributes to the digital tax debate in a way that can be understood by anyone. Such understanding is essential to obtaining global support, achieving tax compliance, and fostering multilateral tax cooperation.