Challenging the nexus for taxation of digital services

The book explores the evolving landscape of international taxation in response to the rise of digital services, particularly those driven by advertising and user data. With global tax rules lagging behind digital business models, many governments are turning to unilateral digital service taxes (DSTs) to claim revenue from users in their jurisdictions. The study addresses three core questions: comparing DSTs with the concept of significant digital presence, examining fairness in taxing digital services under current tax treaties, and assessing the impact on both developed and developing nations within multilateral agreements. The findings highlight a growing preference for DSTs due to their ability to allocate taxing rights to user jurisdictions and reduce harmful tax competition. The research also emphasizes the role of AI in tax enforcement and suggests that DSTs can coexist with reforms to permanent establishment rules, offering a practical path for inclusion in international treaties.