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Invisible Assets, Visible Gaps: Redefining the Principles of International Taxation
Published online by Cambridge University Press: 15 August 2025
Abstract
The global transformation of the economy towards a digital one has fundamentally restructured business operations, economic models, and tax practices. With digital technologies and electronic communications embedded within industries, the digital economy has fostered innovative business models, transformed user behaviors, and increased operational efficiency. However, such a revolution has come at the price of exposing the limitations of traditional international tax models based on physical presence and tangible properties. The entry of borderless, intangible, and platform-based economic activities necessitates urgent tax redesign, especially amid digital businesses, which increasingly interact across borders yet leave no traditional physical presence.
This research describes the revolutionary influence of the digital economy on cross-border taxation, deconstructs the traditional conceptualization of the permanent establishment (PE), and evaluates the emergent principle of “tax where value is generated” based on recent literature as well as emerging global reform approaches.
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- © The Author(s), 2025. Published by International Association of Law Libraries
Footnotes
The author wishes to extend his gratitude to Mr. Sameer Venkatesh, a student at Jindal Global Law School and the General Secretary at India Policy Forum, O.P. Jindal Global University, for all the contributions towards the research support of this work. All views and any errors remain the author’s own.
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