FINANCIAL AND TAX ASPECTS OF DIGITAL CORPORATIONS' BUSINESS ACTIVITY IN INTERNATIONAL MARKETS
Abstract
The paper deals with the digital transformation challenges of the companies’ business models. There had been determined the modern digital technologies that influence the traditional ways of economic activities, favoring thus the emerging of the new business models. Linear and network business models had been compared using such key criteria as assets, availability and nature of the scale effect, value creation, growth rate, dominant source of capital attraction, profitability paradox, level of transactional costs, presence of territorial restrictions for interaction, innovation activity, business value growing driver. It had been determined that the functioning and developing mechanism of digital companies today does not fit into the traditional financial and economic paradigm, when the company's profitability is a key indicator of efficiency and driver for its value growing. The phenomena of "profitability paradox" and "capitalization gap" had been determined on the example of joint-stock companies in various sectors of the US economy. There had been analyzed the level of tax burden on joint stock companies in various sectors of the US economy in 2019 by comparing the effective income tax rates with the federal nominal rate. It was found that the effective tax rates for industrial companies are higher than for digital technology companies. This proves the relevance of the discussion as for the principles of taxation in the context of digital transformation of the economy, in particular, the principle of justice. It had been proved that the current international approaches to the direct taxation that is based on the revenue or on the location of the company under the conditions of business virtualization have certain restrictions for their application. In particular, the question arises about the "significant economic presence" and the search for its criteria. The researches show that the taxation of the foreign company requires the availability of the national customer base; the volume of the digital content created by national users; invoicing in national currency or using the national payment system; availability and maintenance of the website in the language of the country, delivery of goods directly to the customers or provision of accompanying services; marketing activities to attract customers.
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