The ease of transacting digitally is perhaps matched by the difficulty in taxing such transactions. It is redefining the concepts of vendor, recipient, place of supply etc.
The tax authorities have come up with unique propositions that the dedicated server, computers or leased line by themselves can constitute a place of business though there are no definite answers.
The challenge of digital economy has formed part of the discussion on Base Erosion and Profit Shifting (BEPS) without any real consensus how to tax and who will tax the entities earning from digital transactions.
However, countries including India, France, Australia are resorting to unilateral measures like equalization levy, tax on downloading of content, concept of Significant Economic Presence (SEP) and trying to ensure that they receive a share of the revenues generated by the digital economy.
Whether such measures can override the DTAAs and how far the resident recipient can be made liable to bear or deduct taxes are open questions. On the indirect taxes front, taxation of OIDAR presents certain challenges despite special provisions in the GST law.
Lakshmikumaran & Sridharan is organizing a breakfast discussion on ‘’Taxing digital transactions – Multilateral convergence on unilateral measures’’ on 14th of November 2018 at Desire Hall, Hotel Le Meridien, New Delhi. The session will be from 8:00 a.m to 10:00 a.m.
The session will be addressed by Mr. V. Lakshmikumaran, Managing partner, L&S and will be joined by Ms. Sandra Hazan, Co-head of Global Tax Group, Dentons, (France).To understand the nuances of digital transactions and the implications under tax laws.