New research on taxation of digital economy services in the Americas 27 August 18

Increased use of internet-based services has stimulated a debate, among government authorities, on whether and how to collect domestic taxes on such services, regardless of where service providers are established/incorporated. This approach is challenging, since it may not be clear whether a service is provided to a specific audience. It may also be difficult to track service provision itself. Cullen International's new benchmark summarises initiatives already in force and proposals under discussion in the Americas.

While all countries in the Americas impose national and/or local taxes on the sale of all goods and services to resident individuals or businesses, most countries covered in this report have already adapted their legal frameworks to explicitly address tax obligations for digital economy services, including in Argentina, Brazil, Colombia, Canada and the US.

Canada, with its federal and local tax regimes in place, clarified tax filing obligations on digital economy revenues, including for foreign companies targeting Canadian residents.

The US, on the other hand, does not make any distinction between digital and non-digital services, given that taxes must be paid on all revenues, unless specific tax exemptions apply. However, some local governments decided to impose a specific local tax on digital economy products and services.

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