Akademik Veri Yönetim Sistemi
36. International Public Finance Conference, Antalya, Türkiye, 27 - 30 Ekim 2022, ss.538-546
With the digitalization of the economy, digital business activities carried out by multinational companies (MNCs) have begun to take an important place in general economic activities. Accordingly, cross-border mobility of digital goods and services has increased, and production and structuring based on intangible assets has gained importance. Importantly, it has become possible for MNCs to operate in more than one country without the need for a physical presence. This has resut in the inability of the states of sources to tax the profits derived from cross-border digital business activities. The concept of permanent establishment (PE), which tax nexus between profit and the state of source has been shown as a primary justification. The concept of PE is used to include a fixed place where the economic activity is carried out and a dependent agent to be considered as a PE. At this point, the PE requires the physical presence of the MNCs in the source country. This leads to the conclusion that the concept of PE, which requires physical presence, does not provide an adequate tax nexus. For the aforementioned problem of taxation of digital business activities, various proposals were made in OECD's BEPS Initiative, which was initiated in 2013, the package titled "Fair Taxation of the Digital Economy" published by the European Commission in 2018 and OECD's Two Pillar Approach (BEPS 2.0) which was introduced in 2020. The concept of the digital PE based on significant economic or digital presence are within the scope of these proposals. With this study, it is aimed to discuss the concept of the digital PE proposed as a tax nexus in the taxation of profits from digital business activities carried out by MNCs. In line with this purpose; recommendations, proposals and determinations of international organizations and institutions, especially OECD and European Commission, national regulations and national and international tax law doctrine. In this study, it has been concluded that the current PE concept is insufficient to link tax nexus with the source country, since MNCs operate without physical presence and The digital PE concept, which is correctly defined and bordered at the point of eliminating this deficiency, will provide the needed connection, but it needs consistent national practice and international acceptance.