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Taxing digital activities - II. 5) Traders and web-based tools of payment providers

Author: Paul Verhaeghe

  1. Providers of digital trading or digital payment services fall under the general business model of digital services. E-Bay qualifies as such a business model but also stock market traders or digital activities that offer web-based means of electronic payment (World Pay, Pay Pal, Stripe .).

This subtype of business model is particular for the provided service that can be purely digital if related to processing web payments and poses problems under the location criteria of OECD if there is no Permanent Establishment in the Member State.

For such providers the Directive, which organises electronic payments[1], gives cause to a direct legal base for the obligation to hold an office in the Member State where these providers operate (see the following section).

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[1] DIRECTIVE (EU) 2015/2366 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC, OJ, L 337/35, 23 December 2015 – Article 29 (4).

TABLE OF CONTENTS

Introduction
I. How to define digital activities for tax purposes ?
II. Taxing tools of relevant digital activities.
1) Free users and services
2) Paying users
3) Digitally sold goods and material digital interfaces
4) Paid digital services
5) Traders and web-based tools of payment providers
III. Non-fiscal law requirements.
IV. Conclusions.
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