The Impact of the "Two-Pillar" Proposal for Cross-Border Taxation of the Digital Economy and China's Response

Xiaoling Feng; Ting Xiao

doi:10.63313/EBM.9066

Authors

Xiaoling Feng School of Business, Hunan University of Science and Technology, Xiangtan 411201, China Author
Ting Xiao School of Business, Hunan University of Science and Technology, Xiangtan 411201, China Author

DOI:

https://doi.org/10.63313/EBM.9066

Keywords:

Digital economy, Cross-border transactions, Two-pillar, Taxation

Abstract

With the rapid development of the digital economy, the issue of cross-border corporate taxation has become increasingly prominent worldwide, making international tax allocation a critical topic in global taxation governance.This paper begins by examining the genesis of the Two-Pillar Solution, then provides an in-depth analysis of the impacts of OECD's new international tax rules under the digital economy framework. Building on this foundation, it systematically evaluates the differential effects of the Two-Pillar Solution on both developed and developing economies.By identifying challenges Chinese enterprises face in cross-border transactions and drawing comparative lessons from implementation measures adopted by other jurisdictions, the study proposes targeted policy recommendations for China. The findings aim to provide valuable references and insights for addressing cross-border taxation challenges in China's digital economy development.

References

[1] Jackson Simango Magoge,Sayed Qudrat Hashimy.“Base Erosion and Profit Shifting in Taxa-tion:A DeepDive into The Two-Pillar Solution in Tanzania”.International Journal of Law Management andHumanities,2023,pp.889-902.

[2] Vita Apriliasari Politeknik Keuangan Negara STAN.OECD/G20 Two Pillar Solution:Does it PromoteInter-nation Equality,Jurnal Pajak Indonesia,2022,pp.342-356.

[3] Arul Kurian.The Evolution of International Tax regime and the OECD Two-Pillar solu-tion:Analysisfrom a developing country perspective,Economics Issues,2022,pp.61-71.

[4] Guttorm Schjelderup·Frank Stähler.The economics of the global minimum tax,International Tax andPublic Finance,2023.

[5] OECD/G20 Base Erosion and Profit Shifting Project.Two Pillar Solution to Address the Tax ChallengesArising from the Digitalisation of the Economy,2021.

[6] Hongmei Sun. Some Understandings on Global Tax Governance in the Era of Digital Economy—Based on the Cons of the "Two-Pillar" Plan. Fiscal Science, 2021,pp. 26-34.

[7] Wanchao Li, Jing Gao, Siduo Li. The Impact of the "Two-Pillar" Reform Plan for Interna-tional Digital Tax on the Operation Multinational Enterprises and the Future Globalization and China's Countermeasures. Northern Finance, 2023,pp. 9-13.

[8] State Taxation Administration. The "Two-Pillar" Plan Will Start a New Chapter in Global Tax Governance. 2021, Reference Newspaper.

[9] Xiaoyue Wang, Yu Cheng. Tax Optimization of Multinational Enterprises under the "Two-Pillar Solution". China Foreign Exchange, 2020,pp. 28-29.

[10] Tian Jiajun, Liu Yushang. Deconstruction and Response of the Risk of Changes in Interna-tional Taxation Rules under the Digital Economy—A Review of the OECD's "Two-Pillar" Planp. Accounting Monthly, 2022,pp. 140-144.

[11] Dongjie Hao, Shuangzhuan Chen. The Innovation, Impact, and Countermeasures of the "Two-Pillar" Plan for Cross-border Taxation in the Digital Economyp. Tax Research, 2020,pp. 100-107.

[12] Weiyu Ding The of the International Tax Dual Pillar Plan on Each Country and Its Attitude . Science and Technology Entrepreneurship Monthly, 2023,pp. 15-148.

[13] Qing Sun. Research on the Impact of the Change of International Taxation Rules on China's Digital Economy Enterprises andermeasures. International Business Finance, 2024,pp. 76-79.

[14] Qing Zhu, Xueyuan Bai. OECD's "Two-Pillar" International Tax Reform Plan: Implementa-tion and Response. International Taxation, 2024,pp. 3-10.

[15] Xi Cui. Research on the Latest Achievements and Development Trends of the "Two-Pillar" the Digital Economy. Industry Innovation Research, 2024,pp. 72-74.

[16] Hanxiao Kong. Comparison International Solutions to Tax Challenges in the Digital Econo-my. Fiscal Science, 2022,pp. 134-145