{"id":6924,"date":"2018-04-24T14:56:47","date_gmt":"2018-04-24T13:56:47","guid":{"rendered":"https:\/\/www.lauwers-seutin.be\/?page_id=6924"},"modified":"2022-02-03T14:05:32","modified_gmt":"2022-02-03T13:05:32","slug":"paying-users","status":"publish","type":"page","link":"https:\/\/lauwers-law.be\/en\/taxing-digital-activities-in-2018-through-non-fiscal-compliance\/paying-users\/","title":{"rendered":"Paying users"},"content":{"rendered":"[vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″ shape_divider_position=”bottom”][vc_column column_padding=”no-extra-padding” column_padding_position=”left-right” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” width=”4\/6″ tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid”][vc_row_inner column_margin=”default” text_align=”left”][vc_column_inner column_padding=”padding-2-percent” column_padding_position=”right” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” width=”1\/1″ column_border_width=”none” column_border_style=”solid”][vc_custom_heading text=”Taxing digital activities – II. 2) Paying users” font_container=”tag:h2|text_align:left|color:%230b3279″ use_theme_fonts=”yes” css=”.vc_custom_1524578319726{margin-bottom: 20px !important;}”][vc_column_text]\n

Author: Paul Verhaeghe<\/a><\/em><\/p>\n

    \n
  1. This business model referrers to paying websites such as Netflix<\/strong>, or in general all access offered through digital interfaces (1) to digital information or communication (2) that requires payment (3)<\/strong>. Various information sites such as newspapers websites, television-channels on web,.. have this business model.<\/li>\n<\/ol>\n

    Companies with this type of business model are taxed by classic means on the collected fees of the paying users in the Member State.\u00a0 But allocation tools of collecting income can hamper the profit tax base for the Member State where these paying users reside.<\/p>\n

    Paying users, like free users, also give cause to data mining and advertising all over the world.\u00a0\u00a0 So the cash flow that is obtained from advertising, or data mining related to users, should be determined in the overall income.<\/p>\n

    Free business models could be tempted to avoid taxes by rather symbolic subscription fees.\u00a0 Some business models mix both free and paying users.<\/p>\n

      \n
    1. The first allocation problem is the allocation of collecting the fees of the users.<\/li>\n<\/ol>\n

      Delocalization of collecting income can be addressed by recipient <\/em>reports to the Member State of fee payments originating from that Member State. \u00a0Such tax law obligation would also require a Permanent Establishment.<\/p>\n

        \n
      1. The second allocation problem is the allocation of the digital service itself outside the Member State in order to reduce or annihilate the profit tax base on fees collected in the Member State. This problem relates to BEPS and CFC regulation for those providers who have a Permanent Establishment.<\/li>\n<\/ol>\n

        The companies that don\u2019t have a Permanent Establishment may be subjected to the same non-fiscal requirements as the business model of free users and services (see hereinafter section III).<\/p>\n

        Continue reading<\/span><\/a>\n[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][vc_column column_padding=”padding-4-percent” column_padding_position=”all” background_color=”#0b3279″ background_color_opacity=”1″ background_hover_color_opacity=”1″ font_color=”#ffffff” column_shadow=”none” column_border_radius=”none” width=”2\/6″ tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid”][vc_custom_heading text=”TABLE OF CONTENTS” font_container=”tag:h4|text_align:left|color:%23ffffff” use_theme_fonts=”yes” css=”.vc_custom_1524576082505{margin-bottom: 20px !important;}”][vc_column_text]\n

        Introduction <\/i><\/span><\/a>
        \n         I. How to define digital activities for tax purposes ? <\/i><\/span><\/a>
        \n         II. Taxing tools of relevant digital activities. <\/i><\/span><\/a><\/h6>\n
        1) Free users and services <\/i><\/span><\/a>
        \n         2) Paying users <\/i><\/span><\/a>
        \n         3) Digitally sold goods and material digital interfaces <\/i><\/span><\/a>
        \n         4) Paid digital services <\/i><\/span><\/a>
        \n         5) Traders and web-based tools of payment providers <\/i><\/span><\/a><\/h6>\n
        III. Non-fiscal law requirements. <\/i><\/span><\/a>
        \n         IV. Conclusions. <\/i><\/span><\/a><\/h6>\n[\/vc_column_text][divider line_type=”No Line” custom_height=”30″][vc_column_text] Download PDF<\/span><\/a>[\/vc_column_text][\/vc_column][\/vc_row]\n","protected":false},"excerpt":{"rendered":"

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