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Do Tax Experts and Non-Experts Differ in Their Sense of Fairness About a More Even Distribution of "Digital" Profits Across Countries? - Evidence from a Survey in Germany

Journal of Tax Administration

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Title Do Tax Experts and Non-Experts Differ in Their Sense of Fairness About a More Even Distribution of "Digital" Profits Across Countries? - Evidence from a Survey in Germany
 
Creator Greil, Stefan
Schwarz, Christian
Stein, Stefan
 
Description The taxation of multinational enterprises (MNEs) is challenging. The profits of an MNE should be aligned with value creation and taxed accordingly using the arm’s length principle (ALP) to achieve a proper distribution of taxing rights. However, those who are not tax experts, such as tax politicians, often raise concerns that, in a digital economy, arm’s length profits lead to a tax base allocation based on value creation. Therefore, they advocate fair taxation but, on the contrary, don’t describe or explain what can be understood as fair. In this paper, we use a survey to shed light on questions about whether tax experts, such as tax advisors and auditors, and non-experts differ in their senses of fairness with regard to a more even distribution of profits across countries. Our findings indicate that tax experts’ senses of fairness differ from non-experts’ senses of fairness about a more even distribution of profits across countries. Tax experts – to a certain extent – consider the ALP and value contributions, while non-experts do not. As the ALP allocates a vital role to inter-nation equity, it is essential that there is no perceived unfairness in this regard, or the current regime of international taxation is called into question.
 
Publisher Journal of Tax Administration
 
Contributor —
 
Date 2020-06-09
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://jota.website/index.php/JoTA/article/view/263
 
Source Journal of Tax Administration; Vol 6, No 1 (2020): Special Issue: The Tax Profession in the Spotlight
2059-190X
 
Language eng
 
Relation http://jota.website/index.php/JoTA/article/view/263/192
 
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