Digital Service Tax

An Empirical Legal Analysis

Abstract

Digital services have significantly transformed the world economy and significantly challenged existing taxation regulations worldwide. The intangible nature of digital services challenges the taxation of conventional services that have a physical location of where the services is performed and where the right of taxation derives from. Therefore, the need for adequate regulations related to the taxation of digital services has become ever more prominent with various proposals and implementations. The article provides a case content – inferential statistics research on determining whether a digital service tax or the nexus of a significant digital presence may be more applicable for overcoming the challenges posed by the digital services. Additionally, the benefits of artificial intelligence methods in assisting in the taxation of digital services are outlined. The results outline strong preference for the digital service tax as a means to overcome the discrepancy between income related taxation frameworks in various jurisdictions and outlines the strong benefits artificial intelligence methods may have in supporting taxation.