OECD (2020). Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy (p. 4). OECD Publishing.

has been cited by the following article:

• TITLE: Reconstruction of International Tax Rules to Meet the Challenges of Digital Economy

  AUTHORS: Wei Xu

  KEYWORDS: Digital Economy, Corporate Income Tax System, Principle of Benefit, Positive Income Is Levied in the Resident Country, Passive Income Is Levied in the Source Country

  JOURNAL NAME: Beijing Law Review, Vol.14 No.1, March 7, 2023

  ABSTRACT: The current cross-border income tax collection rules of “positive income is levied in the source country and passive income is levied in the resident country” seriously violate the benefit principle in practice. The corporate income tax system is the institutional root of the failure of the above rules. The digital economy with data as the key production factor, invisibility and liquidity, relying on user participation and natural monopoly intensifies the negative impact of the corporate income tax system on the current rules. Starting from the principle of benefit and combined with the theory of value creation, this paper advocates the reconstruction of the cross-border income tax collection rule system, which takes the whole multinational enterprise group as the tax subject, takes the formula distribution as the method, takes the progressive tax rate as the improvement direction, and adopts “positive income is levied in the resident country and passive income is levied in the source country”.