Digital services tax update

Background

The context of the genesis of the DST was the attempt to agree  at an international level how to tax multinationals operating in the ‘digital’ economy more effectively than the existing – somewhat arcane – principles of international taxation would allow.

Those principles include the requirement that a business has some form of taxable presence based on traditional concepts of international taxation – typically that of the ‘permanent establishment’ – in the country concerned to entitle that jurisdiction to subject its profits to taxation there.

So if by means of careful structuring a multinational was able to avoid creating such...