Research On The Conflicts Of Taxing Rights In The Context Of Digital Labor Value Creation

In the context of digital labor,the relationship between enterprises and digital laborers is undergoing profound changes.Digital laborers no longer just play the role of consumers and enjoy the goods and services provided by enterprises,but also assume the role of producers,constantly creating content and data,and these value-creating activities form part of the daily production and operation activities of enterprises and bring them income.With the development of Internet communication technology,digital laborers in the end-consumer market are able to form a network aggregation effect,and the income brought by their value creation activities will be huge,which also means that the income obtained by enterprises through the value creation of digital laborers is also immeasurable.However,the high flexibility of digital enterprises,the intangibility of assets and the high mobility of users make it difficult for source country to reasonably and fairly tax this specific income from multinational digital enterprises,and the problem of conflicts of taxing rights is increasingly apparent.The emergence of the digital labor has made the mismatch between the place of value creation and the place of profit attribution more obvious.The international community has paid attention to the problem of tax base erosion and profit shifting in the digital economy and proposed a series of reforms to ensure a reasonable division of taxing rights and a reasonable distribution of tax benefits in order to avoid further loss of tax base and address international tax avoidance.Among these tax reform measures,such as the significant economic presence proposal,the significant digital presence proposal,the user participation proposal,the pillar one blueprint to allocate jurisdiction to market countries,the marketing intangible assets proposal and the unilateral measures such as the digital service tax introduced by some countries,all mention the importance of user participation in the digital economy.It is true that some parts of user participation theory affirm the contribution and value of digital laborers,however,the complex relationship between the creation of value by digital laborers and the reasonable division of taxing rights cannot be fully understood.The taxing right of a country is based on the economic activities or value created in that country,and the value creation of digital laborers is highly compatible with the principle of value creation,because the role of digital laborers in the end market country is not only as consumers,but more importantly,as producers,they create value and realize the results of value creation in the market country,therefore,it is important to allocate the taxing right to the end market country where the value creation of digital laborers takes place.Therefore,it is reasonable and feasible to allocate the taxation right to the end market country where the digital laborers’ value creation takes place.However,the study on the reasonable division of value creation and taxing rights of digital laborers should not only be limited to the principle of value creation,but should also analyze the internal reasons for allocating taxing rights to the place of value creation of digital laborers and how to reasonably allocate taxing rights.This paper proposes that the allocation of taxing rights to the place where the value of digital laborers is created is a reflection of tax sovereignty of the end market country.Under the guidance of tax sovereignty,the application of the value creation principle to the practice of allocating taxing rights is more theoretically self-consistent.At the same time,in terms of how to allocate the taxing right to the place where the value of digital laborers is created,based on the principle of tax sovereignty,in terms of domestic law,the country where the value of digital laborers is created can protect its domestic tax base by revising and improving its domestic tax law to reflect the importance of the value of digital laborers’ creation.In terms of foreign tax laws,the provisions on permanent establishments in tax treaties can be amended accordingly to guarantee the smooth exercise of tax jurisdiction over the huge income contributed by digital labor value creation.In terms of tax administration,it is necessary for countries to make more detailed laws and regulations on tax administration,to continuously improve the ability of digital tax administration,and to avoid the loss of tax base in the process of exercising tax jurisdiction.At the international level,it is necessary to strengthen cooperation in tax collection and administration,especially the exchange of tax information on the creation of value by digital laborers,and to prohibit transferring the results of value creation in order to assure the results of a reasonable division of taxing rights.