Tax Theory Applied to the Digital Economy - A Proposal for a Digital Data Tax and a Global Internet Tax Agency

Jul 19, 2026

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A proposal for taxing the digital economy through a digital data tax and a global internet tax agency grounded in tax theory and international taxation principles. It reviews the origins of international tax concepts, the G-20 mandate, and how market jurisdictions assert tax claims. The work analyzes digital transaction elements, platform network effects, and the lack of physical presence, then applies equity, benefit, neutrality, tax sovereignty, and administrative feasibility. It also addresses legal and economic issues, including double taxation avoidance, revenue recognition, thresholds, nexus rules, and appropriate tax bases for digital income.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages135

Reading Time5 h 40 min

Contents

Executive Summary

Abbreviations

Chapter 1 Introduction to Taxing the Digital Economy

Chapter 2 Tax Challenges of Taxing the Digital Economy

Chapter 3 Tax Principles Applied to Taxing the Digital Economy

Chapter 4 Economic and Legal Issues of Taxing the Digital Economy

Chapter 5 Tax Policy Issues of Taxing the Digital Economy

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Tax Theory Applied to the Digital Economy: A Proposal for a Digital Data Tax and a Global Internet Tax Agency Tax Theory Applied to the Digital Economy: A Proposal for a Digital Data Tax and a Global Internet Tax Agency Cristian Óliver Lucas-Mas and Raúl Félix Junquera-Varela © 2021 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; [Internet: www.worldbank.org](Internet: www.worldbank.org) Some rights reserved 1 2 3 4 24 23 22 21 This workis a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepanciesin the information, or liability with respect totheuse ofor failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory orthe endorsement or acceptance of such boundaries. Nothing herein shall constitute orbe construed or considered tobe a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) [http://](http://)[ ](http://)[creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license](creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license), you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Lucas-Mas, Cristian Óliver, and Raúl Félix Junquera-Varela. 2021. Tax Theory Applied to the Digital Economy: A Proposal for a Digital Data Tax and a Global Internet Tax Agency. Washington, DC: World Bank. doi:10.1596/978-1-4648-1654-3. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bankshall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; [e-mail: pubrights@worldbank.org](e-mail: pubrights@worldbank

FAQs

What tax proposal does the document put forward for the digital economy?

It proposes a digital data tax together with a global internet tax agency as part of applying established tax theory to digital activities.

Which core tax principles are applied to taxing the digital economy?

The document applies horizontal equity, the benefit principle, neutrality, tax sovereignty, and administrative feasibility to shape taxation of digital activities.

How does the document address legal and policy challenges such as double taxation and nexus rules?

It discusses avoidance of double taxation, the impact of legal structures on taxation, and introduces tax policy considerations such as nexus via sales thresholds and how to tax different kinds of digital income.

Jul 19, 2026

Upload by Quinn