VAT in peer-to-peer content distribution : towards a tax proposal for decentralized networks

Abstract: Peer-to-peer (P2P) is just the most prominent among a number of new technologies and social phenomena which allow easy searching, downloading, and sharing of resources online.P2P networks are increasingly becoming an important medium for the exchange of digital information, in both legitimate and illegitimate scenarios. New business models are prefigured, pioneered, and fostered by early adopters and innovative companies, but the disruptive, personal, many-to-many model P2P enables has largely framed it also as a threat to the media and content industries as a whole. All digital or digitizable media products, software, films and music in particular, whose distribution models have been overlaid by the new, different and largely unorthodox technologically-driven social dynamics of large-scale sharing face an unprecedented challenge, an interesting opportunity, and the risk of legal double-standards. Taxation is a particularly critical element, with vast repercussions on the development of a mature, profitable market.But do P2P transactions fall within the field of consumption taxation? Should they? Will they in the foreseeable future? What benefits businesses enterprises, the international community, the EU and national tax authorities might achieve by considering them fully integrated with the different VAT systems? What fiscal, and hence economic, consequences might result from classifying a file-sharing operation as liable of consumption taxation for all players involved? Would this create a new market and foster economic growth?The status quo for digital and media supplies using P2P technologies will be analyzed in detail within the framing of an interdisciplinary approach. Challenges and opportunities will be assessed through the lenses of consumption taxation and copyright law, and measured against the two foundational powers of a state, the power to apply taxation and the power to punish unlawful action.P2P networks and technologies are going to play a critical role in the distribution of digital content. Whether as a convenient, alternative, economically-sound channel to distribute content through, or as a legal wasteland, remains to be seen. Hopefully, this book will help the conversation along