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A very interesting study commissioned by the Brazilian Confederation of Communication delves into how the difference in applicable regulations represents an objective advantage that tech giants have on traditional media companies.

The concept is not new, but the comparison charts are uncanny, whether one considers the applicable (or not applicable) obligations on content, advertising, ownership, labour law, copyright or rectification.

The authority of states to impose taxes upon entities established in their territory has been one of the most evident examples of national sovereignty. The rise of the digital economy has challenged this "territorial paradigm." Corporate income is taxed in the country of permanent establishment. Therefore, multinational companies offering digital services tend to choose the most-favourable jurisdiction in terms of regulatory and financial conditions, exploiting the extraterritorial nature of digital services.

While businesses have become cross-border and global, the principles of taxation remain strictly territorial, so the direct result is a competitive advantage for online operators over traditional businesses. In addition, tech giants largely implement tax-planning strategies that exploit gaps in tax rules, to shift profits to low-tax or even no-tax locations where there is minimal economic activity, resulting in little or no overall corporate tax being paid.

The purpose of this report is to provide an international overview across the six continents of the domestic developments in the field of taxation of multinational companies operating in the online environment.

Far from being exhaustive, the paper gives the reader an idea of how both complex and urgent it is to obtain from the tech giants a fair contribution to the economy of the countries where their wealth is created. By providing a big picture of the current scenario, this report describes how different regulatory frameworks in the world have addressed (or are trying to address) the taxation of global companies' revenues and digital services. We also touch upon the recent developments of the OECD's "base erosion and profit shifting" measures, the progress of the Inclusive Framework and its plan to deliver a long-term solution by 2020.