Adaptation or Transformation? Reconstructing International Tax Principles for the Digital Economy [before doctoral defense]

Kivonat, rövid leírás

The digitalisation of the economy challenges international tax principles developed around physical presence, identifiable sources of income and transactions between comparable independent enterprises. This dissertation examines whether those principles can be adapted to intangible-intensive business models or whether their underlying structures require transformation. The research develops a principle-driven analytical framework combining doctrinal legal analysis, comparative legal methods and scenario-based consistency testing. It reconstructs the normative foundations of the benefit, residence, source, ability-to-pay and value creation principles, alongside permanent establishment and arm’s length rules. It then evaluates their application to digital business models characterised by scale without mass, network effects, data-driven value creation and integrated intangible assets. Existing reform approaches - including OECD Pillar One, unilateral digital services taxes, UN Article 12B and significant digital presence proposals - are assessed against criteria encompassing doctrinal fidelity, reciprocity, neutrality, distributive equity, administrability and systemic coherence. The findings support a differentiated response. Traditional nexus concepts can be reconceptualised through significant economic presence where demonstrable jurisdictional benefits justify taxing rights. The arm’s length principle remains workable for routine profits and returns supported by reliable comparability, but cannot adequately allocate digital residual profits arising from unique intangibles and integrated functions. Formula-based reallocation requires safeguards for substantive market contribution and distributive symmetry, while unilateral digital services taxes raise neutrality and double-taxation concerns without coordinated relief. The dissertation’s principal contribution is an operational framework for distinguishing principled adaptation from structural transformation. It develops a coordinated bifurcated allocation architecture that retains conventional attribution where its assumptions remain valid and applies formula-based allocation to digital residual profits where they do not. This approach seeks to reconcile doctrinal continuity with the structural demands of digitalised value creation, while acknowledging the additional administrative and institutional coordination it requires.