Skatteudvalget 2017-18, Erhvervs-, Vækst- og Eksportudvalget 2017-18
SAU Alm.del Bilag 102, ERU Alm.del Bilag 98
Offentligt
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Copenhagen January 11, 2018
Jens Svolgaard
[email protected]
How does it become “attractive” to
pay taxes in those countries where
activities
take place and
revenues
are generated?
 ERU, Alm.del - 2017-18 - Bilag 98: Præsentationer fra Skatteudvalgets og Erhvervs-, Vækst og Eksportudvalgets høring den 11. januar 2018 om: Paradise papers, tax havens and the digital economy
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Copenhagen January 11, 2018
Jens Svolgaard
[email protected]
Digitalization, Value Creation
&
“Fair Taxation”
 ERU, Alm.del - 2017-18 - Bilag 98: Præsentationer fra Skatteudvalgets og Erhvervs-, Vækst og Eksportudvalgets høring den 11. januar 2018 om: Paradise papers, tax havens and the digital economy
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Structure of Digital Business Models
Highly digital business models are like all other businesses:
Best product/service at best price at the right place at the right time wins – same for all
There are 4 principal models
1.
2.
3.
4.
Access (to market place) - Uber, Air B&B
Access to Content – Spotify, Deezer
Social Media/Advertising, Facebook, Google
Remote Sales - Amazon
General Characteristics
•
Substantial investments
-- in highly skilled employees and technology
•
Need
big scale/very high revenue
to operate
•
Many years of investment to become profitable
 ERU, Alm.del - 2017-18 - Bilag 98: Præsentationer fra Skatteudvalgets og Erhvervs-, Vækst og Eksportudvalgets høring den 11. januar 2018 om: Paradise papers, tax havens and the digital economy
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Value Creation
There is NO! difference where value comes from between
highly digitalized business models and any other business model
Value in business starts and ends with talented people;
•
entrepreneurs, and
•
talented employees
Value created by businesses
–
Products and services which if successful could give rise to to the
net profit
–
Which is subject to
corporate income tax
– where the value giving rise to the net income has been created
Value created by the market
–
The value created in the individual national market is
consumption
–
Which is taxed through
consumption taxes
 ERU, Alm.del - 2017-18 - Bilag 98: Præsentationer fra Skatteudvalgets og Erhvervs-, Vækst og Eksportudvalgets høring den 11. januar 2018 om: Paradise papers, tax havens and the digital economy
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Specifically on Data & Value Creation
•
•
User engagement is what makes a digital business succeed
Understanding and meeting user needs and preferences is achieved by
•
judicious data collection and
•
smart analytics
Raw –un-structured and/or un-processed data has no value in its own right
The value of data comes from highly skilled and talented people:
•
•
•
•
Determining which data are relevant to collect
Developing systems to collect and store the data
Creating tools to analyze the data and performing of the analysis
Use of the analysis results to make decisions adding value to the business in many different ways
 ERU, Alm.del - 2017-18 - Bilag 98: Præsentationer fra Skatteudvalgets og Erhvervs-, Vækst og Eksportudvalgets høring den 11. januar 2018 om: Paradise papers, tax havens and the digital economy
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S0?
Payment of taxes where revenue is generated?
•
•
Generation of revenue = consumption – should be taxed with consumption taxes
Consumption is in many many countries already taxed with (very high) consumption
taxes/VAT
•
In EU – MOSS (which should be role model for the rest of the world)
Thus this is already taken care of - one down
Payment of taxes where activities take place?
•
The Arm’s length principle – concerns corporate income tax
•
Significant people functions = Activities( Key activities)
•
OECD BEPS Actions 8-10 – Taxation in line with value creation = activities
Thus this is already taken care of also – woohoo, two down
 ERU, Alm.del - 2017-18 - Bilag 98: Præsentationer fra Skatteudvalgets og Erhvervs-, Vækst og Eksportudvalgets høring den 11. januar 2018 om: Paradise papers, tax havens and the digital economy
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However!
Politically in EU and other countries there is desire to collect more taxes from digital
business.
•
This pressure seem to have passed the point where we now are looking at
fundamental changes to principles of international taxation
•
In short the allocation of taxation rights will change towards more corporate tax
due in countries of sales/consumption - where the market is.
Spotify supports this change
•
Technically – long term – there will be rules on a so-called “digital permanent
establishment” = taxable presence for corporate income tax.
Spotify have yesterday in Brussels committed substantial resources to both the EU
and the OECD to support the development of these new and very complex rules
STAY TUNED
 ERU, Alm.del - 2017-18 - Bilag 98: Præsentationer fra Skatteudvalgets og Erhvervs-, Vækst og Eksportudvalgets høring den 11. januar 2018 om: Paradise papers, tax havens and the digital economy
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