This Questionnaire presents responses from GTAP members to an internal detailed questionnaire on Digital Services Taxes, examining their role in addressing the tax challenges posed by highly digitalised business models. From a policy perspective, the document recognises DSTs as a visible and pragmatic, though second-best, response to perceived gaps in the current international tax framework, particularly where value is created in market jurisdictions without a traditional physical presence. It outlines the rationale behind DSTs while acknowledging their limitations as gross-based, unilateral measures.
The document argues that DSTs should be regarded strictly as temporary instruments and ultimately replaced by a coordinated global solution, such as the OECD/G20 Inclusive Framework’s Pillar One. It highlights risks associated with unilateral DSTs, including double taxation, compliance complexity, trade tensions, and potential distortions to investment and competition. The paper sets out key principles to guide future taxation of digital activities, including neutrality, alignment with value creation, legal certainty, proportionality, and multilateral cooperation, emphasising the need for a sustainable and treaty-consistent international framework.
We invite you to read the DST Questionnaire and remain available for any queries you may have.