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Taxation Master Class Series launched

The Malta Institute of Taxation recently launched its Master Class Series and the first master class held was entitled ‘Digitalisation: Will it be a Catalyst for Fundamental International Tax Reform?’

Conrad Cassar Torregiani, MIT president, welcomed the delegates to the first of the Master Class Series, an interactive discussion forum on select tax topics, which will be a biannual fixture in the calendar of events organised by the institute. 

Each master class will take the format of a round-table discussion for a small group of specialist tax professionals, from both the public and private sphere, led by a local or international expert.

The series, which is intended to provide a forum for advanced education and the exchange of views on topical tax issues, complements the institute’s commitment to the development and promotion of tax education in Malta.

A forum for the exchange of views on topical issues

The first master class session was led by John Vella, Associate Professor of Taxation in the Faculty of Law at the University of Oxford, a Fellow of Harris Manchester College and a Programme Director at the Oxford University Centre for Business Taxation. 

The subject-matter of the master class was the taxation of the digital economy. The focus of the international tax community is now firmly on the digitalised economy – this is evidently at the top of the tax policy and general political agenda. Digitalisation has brought international corporate tax to a turning point. The immediate political concerns are two-fold: profit shifting by highly digitalised companies, and the inability of existing rules to deal with the perceived value of data, users and consumers in a market country without physical presence in that market country.

But, as Prof. Vella explained, there are two larger issues at stake here: The first is how to allocate taxing rights among countries; the second concerns the type of reform required. It has become clear that the current debate goes beyond how to tax highly digitalised companies and could lead to a more fundamental change.

The session started with a presentation on digital business models by Marc von Brockdorff, co-founder and director of engineering at Hotjar, providing a context to the main theme. Prof. Vella then proceeded to share his thoughts, and lead an interactive discussion, on the impact of digitalisation on the international corporate tax system, the attempt to ring-fence the digital economy and the likelihood of a more fundamental reform which would alter the very foundation of the current international corporate tax system.

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