Taxing profit from remote digital sales

What is it about?

Small countries do benefit from taxing the import of digital services. In fact, some countries have already decided to tax digital sales. If such practice spreads, the quality of digital services will be negatively affected. It is argued that countries exporting digital services have reason to respond by promoting an international tax regime in which the profit earned on remote supplies of digital services is split between the countries involved.

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Why is it important?

The European Commission has proposed to introduce a Digital Sales Tax. It is therefore important to analyze the efficiency effects of such a tax and to assess the pros and cons of the introducion.