miércoles, 21 de mayo de 2014

Beyond technology: Taxes and contracts in the digital economy

Beyond technology, are the biggest barriers for the digital single market. There is a growing gap in the digital services area between what is technologically possible and is available for EU consumers and businesses, and what can be enjoyed without legal or tax uncertainty in the cross-border scenario where the single market relationships happen. Nevertheless, it looks the next couple of years could be key to solve some of the main issues that stand between us and the digital single market.

Let us firstly look yo the taxation issue. The digital revolution has accelerated the frictions between the local nature of the taxation rules and the global character of trade. The crisis has bring an interest to tackle the base erosion and profits shifting (BEPS) issue, the explotation of the gaps available in tax systems to avoid taxation in home countries by pushing activities abroad to low or no tax jurisdictions. The concept of physical presence that is the cornerstone of the taxation systems, how to tax the value created from data, the characterisation of the payments made in new business models and the VAT collection are the among the challenges the governments would like to solve before giving a deciding push to the digital economy. Without solving the BEPS problem the tax system that is at the base of the welfare state will be progressively harmed. The awareness of the problem by governments can be tracked in some of the recent European Council Conclusions (for instance, point 4 of the Octuber 2014 conclusions). First drafts on how to solve the BEPS problem have been put forward by the expert groups set by OECD and the European Commission.

Among the complexity of the BEPS issue, VAT collection is one of the challenges looks closer to its solving. The modernisation of VAT system has been the focus of some work in the last years. From January 1st of 2015, new rules will be in place in the EU for telecom, broadcasting and electronic services. The new rule is charging the transaction in the country of the consumer instead of the country supplier. Although the rule will not be applied to any kind of digital services in a first stage (for instance those that are merely a system for placing orders for physical objects), the one-stop shop designed for the implementation of the new rules could be easily extended for being used in all kind of digital services. This approach it is also included in new guidelines for VAT published by the OECD, ensuring a broad consensus in such a critical issue.

The taxation issue is the main worry of governments, but a bigger space in businesses and consumers concerns is occupied by the legal certainty of contractual rules. Until some point, the Consumer Rights Directive establishes an important set of common rules for the single market. Nevertheless, there are still some gaps to be filled. The Common European Sales Law, proposed by the European Commission in 2011, will eventually fill this gaps with a set of common (but optional rules) for trade transactions in the single market. Although initially proposed for any kind of transactions, the amendments proposed by the European Parliament put the focus in non-physical relationships like those conducted through the Internet. It is foreseen an approval of this new legal framework by the begining of 2015.

It is commonly said that technology is the minor problem for the development of a new service. It looks more true than ever according what we have seen in the last 25 years since the dawn of the web. Unfortunately, we still have to create the framework conditions to unleash all the potential of the digital economy. Taxation and contracts are part of this framework, but I´m sure any reader could identify at least one more.

No hay comentarios:

Publicar un comentario

palyginti kainas