The Value Creation Principle: Delving into the Past to Understand Its Future Role in the International Tax Reform - Intertax View The Value Creation Principle: Delving into the Past to Understand Its Future Role in the International Tax Reform by - Intertax The Value Creation Principle: Delving into the Past to Understand Its Future Role in the International Tax Reform 53 3

The role of value creation when allocating taxing rights has been a central topic of debate since its introduction in the OECD Base Erosion and Profit Shifting (‘BEPS’) Project. This discussion has led to disagreements and uncertainties regarding the meaning and function of the term. This article aims to clarify the issue and demonstrate that the value creation principle has always been a fundamental concept in international tax law with its origins in the 1923 Report of the League of Nations. Consequently, solutions to contemporary challenges in taxing the digital economy can be found by interpreting it in a manner that addresses modern digital requirements. There is no need for new revolutionary measures; rather, this principle should serve as the commencement for revising the current international tax structure beginning with a revaluation of its foundational elements.

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