Overhauling corporate taxation in the digital economy. CEPS Policy Insights No 2019-15/October 2019

Is the corporate income tax (CIT) still an efficient system for taxing companies today? The CIT was introduced when economies were characterised primarily by tangible assets and goods and by limited international trade. Globalisation, digitalisation and the increasing weight of immaterial goods in company transactions and balance sheets have rendered that system outdated. These radical changes call for equally radical reflections on how to reform the CIT, bearing in mind the need for a corporate tax system that is fit for both the digital and the traditional economy, in developing and developed countries alike. Rather than offering a complete solution, this paper discusses various approaches that could contribute to a solution. First, we suggest that the CIT base should always be strictly aligned with the accounting profit and loss account, eschewing special adjustments for tax purposes. Second, a more radical possibility would be to abandon altogether the reference to corporate income and tax companies instead on cash flow, based on destination. And, third, the possibility could also be explored to tax companies with reference to ‘presumptive’ indicators of activity, rather than on the basis of public accounts. Presumptive indicators are already used in federal systems to allocate corporate income among decentralised jurisdictions. These propositions would not be viable without international agreement, at least at the level of the European Union. Such an agreement may prove difficult given the conflicts of interest between EU member states and between them and the United State

The future of work: Towards a progressive agenda for all. EPC Issue Paper 9 DECEMBER 2019

Europe’s labour markets and the world of work in general are being transformed by the megatrends of globalisation, the fragmentation of the production and value chain, demographic ageing, new societal aspirations and the digitalisation of the economy. This Issue Paper presents the findings and policy recommendations of “The future of work – Towards a progressive agenda for all”, a European Policy Centre research project. Its main objectives were to expand public knowledge about these profound changes and to reverse the negative narrative often associated with this topic. It aimed to show how human decisions and the right policies can mitigate upcoming disruptions and provide European and national policymakers with a comprehensive toolkit for a progressive agenda for the new world of work

The Digitalisation of African Agriculture Report 2018-2019

An inclusive, digitally-enabled agricultural transformation could help achieve meaningful livelihood improvements for Africa’s smallholder farmers and pastoralists. It could drive greater engagement in agriculture from women and youth and create employment opportunities along the value chain. At CTA we staked a claim on this power of digitalisation to more systematically transform agriculture early on. Digitalisation, focusing on not individual ICTs but the application of these technologies to entire value chains, is a theme that cuts across all of our work. In youth entrepreneurship, we are fostering a new breed of young ICT ‘agripreneurs’. In climate-smart agriculture multiple projects provide information that can help towards building resilience for smallholder farmers. And in women empowerment we are supporting digital platforms to drive greater inclusion for women entrepreneurs in agricultural value chains

User Participation in Value Creation

This article examines HM Treasury’s proposal to account for the active participation of users in value creation in certain digital platforms. The first key question is whether there is any reason to believe, as HM Treasury suggests, that users only meaningfully or actively contribute to value creation in the context of certain digital platforms. The article accordingly explores the factors HM Treasury sets out for the attribution of income to active user participation, including features such as network effects, multisided business models, and a lack of physical presence in the jurisdiction of the user. It concludes that if a user participation concept were adopted into international tax norms, it is unlikely to be limited to digital businesses or to the business models particularly highlighted in the proposal issued by HM Treasury. The analysis proceeds by considering the factors set out by HM Treasury for the attribution of income to active user participation in the context of pharmaceuticals and biologics, the financial sector, and the “internet of things”. For example, the article concludes that under HM Treasury’s user participation theory, returns from certain London-based financial intermediation businesses would need to be reallocated to other jurisdictions. Moreover, as the internet of things develops, one would expect the range of business affected by the active user participation concept to constantly expand

Measuring machinewashing under the corporate digital responsibility theory: A proposal for a methodological path

Recently, a number of scholars have warned against the risk of a new form of deliberately deceptive communication companies use to assure stakeholders of their good intentions in the adoption and development of digital technologies and advanced information systems based on artificial intelligence. This corporate behaviour, defined as machinewashing, in an attempt to empower engagement processes in the stakeholders’ network and satisfy stakeholder expectations with regard to the ethical implications of the use of artificial intelligence, has, in the final instance, the prevailing purpose of achieving better levels of corporate performance and reputation. However, thus far, scholars have not provided any empirical studies on the existence of corporate machinewashing strategies, and there is a significant lack of clarity as to how to measure machinewashing. Utilising the corporate digital responsibility theory, this paper offers an original methodological contribution to the nascent research field dedicated to machinewashing behaviour. Particularly, this paper provides considerations for detecting machinewashing through an analysis based on the comparison between the information capacity of the reporting and the information reliability level as a proxy for machinewashing strategies and, thus, for the real impact of digitalisation strategies on stakeholders. To this end, we conducted an exploratory content analysis of the reports of ten Italian listed companies from ten different industries. Overall, looking at the gap between what companies say about the impact of digitalisation from an ethical perspective, and what really happens, our results define a possible path for identifying machinewashing, the fields where it happens and the practices that companies use in order to realise these strategies

Data Value Chain in Platform Business Models

Building on a unified definition and the main attributes that have been identified for platform business models, this paper aims to devise a unified data value chain and shed a new light on the value creation process within platform business models. To meet the main aim of the paper, the following research question is addressed: "How do platform business models create, deliver and capture value through their business model configurations?". Through an integrative literature review, this paper confirmed that data is the major asset in value creation through platform business models. Furthermore, this paper has devised a unified data value chain that encom-passes sequential forms of digital data such as raw data, pre-processed data, processed data, patterns and smart data, gaining value via numerous processes throughout the data value chain. It was highlighted that interlinked processes throughout the data value chain transformed raw data into the most valuable form of data, knowledge.O