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Tax Law researchers write report for the World Economic Forum

Researchers from the Department of Tax Law were lead authors of a report on corporate taxation and digitalization for the World Economic Forum.

Irma Mosquera Valederrama

The increasing digitalization of the economy in a context of reduced significance of borders has put the way multinational companies are taxed around the world under stress. While previously, companies were mainly taxed on where they were physically carrying out their business, this principle is not entirely adequate anymore. Since a significant part of global economic activity has moved to the internet (where of course physical locations no longer really matter), new principles for taxation are needed.

For several years now, international organizations such as the Organization for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF), the United Nations (UN) and many other stakeholders have proposed and discussed ideas for reforms.

Despite the relevance of the topic for a broad audience (taxation lies at the heart of our societies), these discussions are often hard to follow for non-experts due to the very technical vocabulary used and the myriad of different stakeholders involved.

Last spring, the World Economic Forum (WEF) brought together around 30 stakeholders to work on a white paper aimed at explaining these debates in an understandable way. The WEF appointed Irma Mosquera Valderrama, Associate Professor at the Department of Tax Law at Leiden Law School, and Frederik Heitmüller, PhD candidate at the same department, as lead authors for the project.

The result can be accessed here.

The paper explains how developments in the global economy have led to problems in corporate taxation and the content of the various proposals for change. The authors present the positions and opinions of many different stakeholders including businesses, civil society organizations, tax consultancy firms, international organisations, governments and academics.

Rather than being exhaustive on all details, the paper aims to be accessible to anyone new to the topic, and offers help in navigating the landscape of actors and ideas involved in reform processes.

The paper is also an outcome of the ERC-funded GLOBTAXGOV project at the Department of Tax Law in Leiden. This project investigates, taking an interdisciplinary approach, global tax governance and the implementation of international standards in tax matters in 12 countries around the world. More information on the project can be found here and here.

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