A Critical Examination of the Digital Services Tax under International Law: A Comparative Study Based on National Systems

Abstract

The globalization of the digital economy has had a great impact on traditional international tax rules. Cross-border digital services have the characteristics of virtualization and no boundaries, which makes the traditional systems such as the principle of permanent institutions and the determination of the place of origin cannot be applied normally. Many countries unilaterally implement the Digital Services Tax (DST), which has led to problems such as jurisdictional conflicts, double taxation and trade friction; and the coordination progress at the international level is relatively lagging behind. From the perspective of international law, this article uses common methods such as literature research, comparative analysis and normative analysis to systematically study the legislation of digital service tax in the European Union, the United States, India, the United Kingdom and other typical regions. We distilled the commonalities and differences of these regional systems, and analyzed the reasons for the differences from the four aspects of digital economic development level, tax sovereignty game, legal tradition and international discourse. At the same time, we also revealed the legal conflict between the digital service tax and the current tax agreement, the principle of tax fairness and the principle of national sovereignty. On the basis of sorting out existing coordination practices such as the OECD “two-pillar” program, regional coordination and bilateral agreements, we have built a coordination path at the international law level with tax sovereignty equality, international tax fairness and tax neutrality as the guidance. Finally, in combination with the current situation of China’s digital economic development and tax system, specific suggestions for the construction of China’s digital service tax system, rule connection and international participation are put forward to provide theoretical support and practical solutions for improving China’s digital tax rule of law and participation in global tax governance.