Parallels Seen in State, EU Efforts on Digital Taxation

Stephen Kranz said the EU’s attempt to tax the income of remote sellers “is very different from taxing consumption,” while states in the US “are of the view that they can tax income of companies even without a permanent establishment.” Mr. Kranz noted that international tax discussions are turning to an approach states have employed for decades: “using formulary apportionment in conjunction with transfer pricing concepts to tax what they believe is their appropriate share of income.”