According to new Global Trends research by Cullen International, most of the surveyed countries do not apply direct taxes on the digital economy, while they all apply value added tax (VAT) on the digital economy.

Among the monitored countries, only India and Turkey, as well as a few individual EU member states, have legislation about digital services taxes (DSTs). Brazil published a bill to tax the digital economy that is under debate.

Other monitored countries do not apply direct taxes on digital services, either because they are still evaluating imposing DSTs (the EU, Japan), considering possible studies in the future (China), or focusing their work at OECD/G20 level (Australia, the EU, Korea, South Africa, the US).

The Organisation for Economic Co-operation and Development (OECD) announced in July 2021 that 130 countries agreed on a statement establishing a new framework for international tax reform. However, there is still a long way to go before this might be implemented, which is unlikely before 2023 at the earliest.

Brazil and the US only apply VAT on the digital economy at the state or local level. The other monitored countries apply VAT at a national level, including both domestic and cross-border transactions.

This 17-page Global Trends benchmark covers different aspects of taxing the digital economy:

• Direct taxes: base and rate, services and companies covered (geographic scope and size)
• VAT: rate, services and geographic scope

The research covers: Australia, Brazil, China, the EU, India, Japan, Korea, Saudi Arabia, Singapore, South Africa, Turkey and the US.

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