DIGITAL SERVICES, USER DATA AND THE LIMITATIONS OF WITHHOLDING TAXES ON INCOME DERIVED BY NON-RESIDENTS

Abstract

This article addresses the challenges raised by the new business models that have emerged in the digital economy for the Brazilian withholding income tax regime applied to non-residents. This mechanism has been proposed in important international tax law studies as a remedial tool for the difficulties raised by the digital services. This article proposes an investigation on how theses services generate value from user data, as an important intangible asset, in order to verify if income derived by big digital companies may be indeed reached by withholding taxes. It was possible to conclude that a withholding tax regime, by itself, proved to be insufficient to reach that income.