The specific definition of a
commodity may vary depending on the country's sales tax laws.
In Jordan, sales tax laws provide
the legal foundation for taxing goods and services.
اضافة اعلان
The sales tax law defines taxable
goods as any tangible or intangible property that is sold or exchanged for a
price. This definition includes digital goods and services such as software,
music, and e-books.
However, the question remains
whether data collected by social media platforms can be considered a tangible
or intangible property that is sold or exchanged for a price.
Some argue that data is not a
physical product and therefore cannot be taxed under existing sales tax laws.
Your data is intangibleWhile others disagree, believing
that data should be considered an intangible property that is sold or exchanged
for a price.
The arguments made for this side
are that social media platforms often sell access to user data to third-party
advertisers and marketers.
This access is often sold at a
premium price based on the amount and quality of the data collected.
Therefore, as social media
platforms continue to grow in popularity and usage, the data collected by these
platforms has become a valuable commodity.
The question remains whether data collected by social media platforms can be considered a tangible or intangible property that is sold or exchanged for a price.
This data is often used for
targeted advertising, market research, and other purposes.
However, the question of how to
tax this data has become a topic of debate in many countries, including the
Kingdom.
The legal foundation for taxing
data collected by social media platforms as a commodity can be based on the
principle of economic value.
This principle suggests that any
resource that generates economic value should be taxed. In the case of social
media platforms, the data collected on its users are a valuable resource that
generates economic value.
Additional fees may applyTherefore, this data can be taxed
as a commodity. Furthermore, the legal foundation for taxing data can be based
on the principle of fairness.
Businesses that generate economic
value through the use of this data should contribute to the tax system. By
taxing this data, the tax burden is spread to businesses that benefit from it,
rather than being used solely by
consumers.
In Jordan, the legal foundation
for taxing data collected by social media platforms can be based on the
existing VAT system. The VAT law is applicable to all businesses that generate
an annual turnover of JD30,000 or more.
Therefore, social media platforms
that generate revenue from selling data can be subjected to VAT.
The digital economy has
significantly impacted traditional businesses, primarily because of the vast
amounts of data that digital companies have access to, which allows them to
develop products and services directly tailored to user preferences. This
development has led to technological advancements, improved efficiency, and
enormous profits.
Any resource that generates economic value should be taxed. In the case of social media platforms, the data collected on its users are a valuable resource that generates economic value.
For instance, in 2020, Google's
parent company, Alphabet, reported revenue of over $182 billion, while Facebook
reported over $85 billion in revenue for the same year. These figures
demonstrate the immense wealth and power of the FAANG group.
Several countries have proposed
implemented new tax laws specifically targeting digital services such as social
media platforms. For example, France recently passed a digital services tax law
that imposes a 3 percent tax on revenue generated by large tech companies from
digital advertising and other online activities.
Meanwhile, the EU and the UK are
already making strides in this area.
In 2018, the European Parliament
passed a resolution stating that "taxation of digital companies must take
into account the value created by users' data." Similarly, in the UK, in
March 2021, the government announced its intentions to introduce a new digital
services tax (DST), initially levied on the revenues of search engines, social
media platforms, and online marketplaces that fall within the tax's scope.
Under the DST, companies will be taxed at two percent on revenues generated
within the UK.
In Jordan, there has been no
specific legislation introduced to address the taxation of data collected by
social media platforms. However, it is possible that existing sales tax laws
could be applied to this type of transaction if it can be demonstrated that
user data is being sold or exchanged for a price.
Taxation of data collected by
social media platforms remains an unresolved issue in many countries, including
Jordan.
While existing sales tax laws
provide some legal foundation for taxing intangible goods and services, there
is still debate over whether data can be considered a taxable commodity.
As the use of social media and
other digital platforms continues to grow, it is likely that governments will
need to develop new tax laws and regulations to address this emerging
issue
Hamza Alakaleek is a
Corporate lawyer and tax consultant with post-graduate degrees in international
political economy, international business law, and law and technology with a
focus on internet of things, artificial intelligence and data protection.
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