Taxing the cloud: whose servers, whose location, whose revenue?

Abstract

The unprecedented growth of cloud computing has revolutionized business operations globally, yet existing tax frameworks struggle to accommodate this borderless digital economy. This research aims to propose a coordinated global tax regime tailored for cloud computing services that addresses key challenges around determining tax nexus, ensuring fair taxation, and minimizing economic distortions. Guided by the Significant Economic Presence and Network Theory of Globalization Concepts, a comprehensive legal analysis will examine domestic laws, international agreements, and judicial precedents across major jurisdictions to reconcile conflicting interpretations on taxation of cloud computing services and user-generated value. Qualitative techniques encompass comparative legal studies and stakeholder consultations to balance diverse interests equitably. The integrated research design enables developing a robust coordinated global tax framework that establishes clear nexus rules linking tax liabilities to server locations and user contributions, adheres to fair taxation principles, and fosters continued digital innovation through minimized distortions. Ultimately, this study establishes a legal-economic roadmap for modernizing outdated tax systems and stabilizing global economic trajectories in the digital age.