| Abstract [eng] |
The global financial crisis (2007-2008) led multinational companies look for gaps in tax systems in purpose to avoid paying corporate income tax, where the main economic activity takes place. Nowadays, when the digital economy is gaining ground, countries are trying to tax income earned by foreign business companies without physical presence within their jurisdiction. International organizations and their member countries are seeking to improve the rules of the international tax regime and to solve these challenges presented by the digital economy. In response to ongoing global tax evasion cases, OECD initiated 15-action BEPS project, which was approved in 2015 with Action 1 addressed for tax challenges arising from digitalisation. Global agreement on how digital business should be taxed still hasn‘t been reached yet; therefore, individual countries have already approved or are in the process of adopting their own digital service taxes. These circumstances make difficult to assess the impact of the measures provided in BEPS project Action 1 on the taxation of digital businesses. The aim of this Master's final degree project is to investigate the impact of the OECD approved BEPS Action 1 measures on digital business taxation and corporate income tax collection in Lithuania. The main results of the project: • An analysis of the scientific literature revealed that in recent years the scale and pace of digitization has been interacting with aggressive tax planning schemes to shift the profits of multinational companies to low-tax jurisdictions. • The study results revealed that a part of measures provided for in Action 1 of the BEPS project have been transposed into Lithuanian national law, i. e. to the Law on Corporate Income Tax of the Republic of Lithuania (the provisions of the order came into force on the 1st of January, 2019). The tax experts would recommend for Lithuania wait for a global OECD or EU decision on a digital services tax, rather than take individual actions. Since 2016, the number of submitted corporate income tax declarations has been increasing and the average income tax rate declared in a single tax return has also been increasing, when the activity is classified in Section J “Information and communication” according to classification of economic activities. MOSS system participants, foreign units executing digital business in Lithuania, - are not subject of corporate income tax in the country. Research methods: analysis and systematization of scientific literature, legal acts analysis, documents analysis, comparative data analysis, semi-structured interviews with experts. |
