- 20 Marks
IT – Aug 2020 – L1 – Q5 – E-Commerce and International Tax Challenges
Identify and explain three Pillar One proposals for taxing rights in the digital economy.
Question
a) In the policy note to address the tax challenges of the digitalization of the economy, the G20/OECD Inclusive Framework identified two Pillars, (Pillar One and Pillar Two) as proposals for unified approach in addressing the tax challenges in digital economy. Under Pillar One, three proposals have been articulated to develop a consensus based solution to give taxing right to jurisdiction from which income are earned.
Required Identify these three proposals under Pillar One and briefly explain how they can influence the current taxing right of states.
b) Within the context of the existing taxing rules contained in Double Taxation Agreements to determine a taxable presence of non-resident person in contracting states, briefly explain how each of the following impacts on the current taxing rules contained in the Double Tax Agreements that Ghana entered into with other countries. i. Computer Server ii. Independent Internet Service Provider iii. Website
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