Taxation of the Digital Economy in Asia and the Pacific

The international community has made encouraging progress in taxing the digital economy in recent years. At the national level, pioneering countries, including those in Asia and the Pacific, have introduced new policies to capture the tax base of the digitalized economy, while more are exploring different potential options. At the global level, different approaches for reforms in international taxation norms and practices have been tabled, most notably the release of the Two-Pillar solution of the OECD-G20-led Inclusive Framework and the new Article 12B of the United Nations Model Double Taxation Convention in 2021.

However, significant gaps remain. On the one hand, smaller and poorer developing countries are still marginalized in international taxation reforms. None of Asia-Pacific’s least developed countries is a member of the OECD-G20-led Inclusive Framework, while the new Article 12B of the United Nations Model Convention is still at an early stage of building up the momentum. On the other hand, developing countries in Asia and the Pacific still lack effective but easy-to-use tax options for tapping into the digital economy revenue base, despite the growing fiscal pressure to support a robust economic recovery in the short term and the effective pursuit of the SDGs in the longer run.

Objective

The workshop serves to better inform governments of Asia-Pacific developing countries in their exploration of policy options for taxing the digital economy and solicit country feedbacks on how the United Nations can better support them on this front.

More specifically, it aims to:

• Introduce the latest changes in the UN Model Convention relating to the tax treatment of the digital economy and provide an overview on the pros and cons of different approaches.
• Share the knowledge on easy-to-use options for taxing the digital economy and facilitate peer learning on real world practices and lessons.
• Solicit opinions and feedbacks from Asia-Pacific developing countries to better inform United Nation’s future support to countries on this front.

ESCAP is organizing a related event on The Digitalization of Tax Administration in Asia and the Pacific on 26 October 2022 from 14:00 to 17:00 Bangkok time.

Please refer to https://www.unescap.org/events/2022/digitalization-tax-administrations-asia-and-pacific