Rethinking personal income taxation in a digitalized world

In the past decade, the central focus of international policymakers and organizations such as the OECD and the European Commission has predominantly revolved around the restructuring of corporate income tax in a digitalized world, leaving individual taxation largely within the purview of domestic legislation. Nevertheless, the traditional concept of tax competition significantly influences the domain of individual taxation. Despite this attention, there persists a conspicuous lack of coordinated efforts in addressing the myriad obstacles to cross-border mobility.

The digitalization of the economy presents significant challenges to personal income tax systems, particularly in two key areas: determining tax residency and tax competition between countries. With the rise of remote work and digital nomadism, traditional criteria for establishing tax residency, such as center of vital interests and physical presenceare questioned. This ambiguity makes it difficult to ascertain in which country an individual should be taxed, leading to potential double taxation or double non-taxation. Moreover, the borderless nature of digital transactions allows individuals to generate income from multiple countries, further complicating the tax residency determination.

On the other hand, the digital economy intensifies tax competition between nations as they strive to attract high-net-worth individuals, mobile highly educated individuals and digital nomads. Multiple states have  enacted special tax regimes to attract such mobile individuals or are planning to so .This competition can lead to a "race to the bottom," where countries lower their tax rates to attract investment, ultimately reducing overall tax revenues and impeding the ability to fund essential public services. Addressing these challenges requires international cooperation to develop standardized rules for tax residency and to establish fair and transparent mechanisms to address tax competition in the digital era.

The increased digitalization of the economy and the growing mobility of individuals necessitate immediate scholarly investigation to identify solutions for developing sustainable income taxation systems that aligns with the contemporary world. In this context, our research environment provides a stimulating academic setting, positioned at the heart of Europe within a robust European and global network of esteemed international tax experts. As part of this opportunity, the selected candidate will have the option to engage in fundamental research activities overseas throughout their tenure, while maintaining regular communication with their supervisor. This approach aims to foster an enriched scholarly experience, facilitating comprehensive exploration of pertinent issues pertaining to income taxation and its adaptation to the prevailing dynamics of our era.

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