54 participants from 31 IOTA member countries discussed last week in Budapest how tax administrations can conduct effective compliance actions to ensure that the digital economy operators fulfil their tax obligations. The IOTA workshop “Ensuring Tax Compliance of Digital Economy Operators” on 13-15 March offered a great platform for exchanging views and experience in a subject which means both challenge and risk for tax administrations.
The digital economy is continuously developing and this makes it difficult for tax administrations to conduct traditional compliance actions. New business models and actors facilitate e-commerce, where hidden business transactions can be conducted through intermediaries (for some brokerage fee) or directly between the service provider and its customer. Participants examined how to utilise comparative data extensively in controlling both the digital and “traditional” economy and the role of data analytics not only in selecting taxpayers for control/auditing purposes, but also to facilitate voluntary compliance. A special attention was put on the sharing economy platforms in the digital economy. Modern technological tools (e.g. for data extracting/scraping) for collection, analysis and use of data about digital economy were also shared. Participants agreed that providing guidance on tax obligations for digital economy operators and users could increase the level of voluntary compliance.
During the 2,5 days long workshop delegates had the opportunity to listen to presentations from different countries. Colleagues from Sweden, Lithuania, United Kingdom and Spain shared their experience and views on emerging business models and new actors in digital economy. Methods and techniques applied for identification and treatment of digital economy actors were presented by Bulgaria, Italy and France. Finland and Hungary presented technological tools for data collection and data scraping. Approaches to guide and instruct taxpayers operating through digital platforms on tax obligations were presented by Denmark.
During the workshop, three group work sessions were organised and participants had the opportunity to share their views, experiences and suggestions to the presented issues extending by this the scope of the subjects.
The event was concluded by a Panel Debate summarizing some of the unresolved issues in the area of tax compliance for digital operators, including legal differences in jurisdictions, data collection as well as their quality and accuracy and other issues. The Panel also discussed the importance of international cooperation and IOTA’s role in fostering exchange of best practices and different national solutions.