Volume 47 (2019) / Issue 2

Johannes Becker, Joachim Englisch, 'Taxing Where Value Is Created: What’s ‘User Involvement’ Got to Do with It?' (2019) 47 Intertax, Issue 2, pp. 161–171


According to the OECD and the EU Commission, profits should be taxed ‘where value is created’. A commonly accepted definition of the term ‘value creation’ is so far lacking, however. This article offers a pragmatic and contextualized analysis of the new ‘value creation’ paradigm and examines its implications for international tax policy in the era of digitalization. In particular, it critically discusses the role of users that are said to contribute to value creation, for example by forming valuable networks, providing data or posting online content. The authors reject the argument that, due to user involvement in a firm’s value creation, the location of user groups and networks should give rise to taxation rights. They conclude that a better option is to recalibrate the international tax system based on the concept of sustained user relationships (SURE) which aligns itself with the rationale of a consistently defined notion of ‘value creation’.

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ISSN: 0165-2826
ID: TAXI2019015