Taxes, the internet and the digital economy

James Corkery, Jay Forder, Enrico Mercuri, Dan Jerker B Svantesson

Research output: Contribution to journalArticleResearchpeer-review


The Internet and the Digital Economy have disturbed and outmanoeuvred taxes. First, there is the problem of taxing transactions that take place across the Internet. Services can be delivered digitally. Some goods are digital goods – for example, software programs, music and videos downloaded from the Internet. Can and should you tax such transactions with a sales tax, and if so where? Second, the Internet has aided global and multinational companies to shift their business about the world to catch favourable tax environments. The Digital Economy is nimble. For example, Google came under fire when the web giant paid just £6m corporation tax, while notching up £2.5bn of sales in the UK. One headline stated: ‘Google 2.4% Rate Shows How $60 Billion is Lost to Tax Loopholes’. Apple has also attracted criticism. In response, Apple welcomed an examination of the US tax system, ‘which has not kept pace with the advent of the digital age and the rapidly changing global economy’. In our increasingly borderless globe, national tax laws cannot do the job on their own. Global companies – especially the digital multinationals – are easily able to elude higher taxing jurisdictions. Capital moves fluidly and at lightning speed but these dramatic efficiencies of the digital economy comprehensively disrupt taxing patterns. National economies are being forced to cooperate, to shore up the revenue leaks and to pursue some sort of common ground and global parity among tax systems.
Original languageEnglish
Pages (from-to)105-117
Number of pages13
JournalRevenue Law Journal
Issue number1
Publication statusPublished - 1 Jan 2013


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