Innovation and Taxation: A Fundamental Approach to Nexus in BEPS Action 5 and 1

In this work I discuss (i) reductions limiting the net return (deductions, withholdings on gross income and allocation of income to the source state) and, (ii) issues related to the treaty characterization of software, digital products and automated digital services. In that turbulent scenario, my research shows that the supply side of innovation needs urgent attention from an academic and a policy perspective. While this research presents a fundamental and different approach to innovation and taxation, it invites to reconsider the impact of BEPS Actions 1 and 5 through the lens of innovation policy, with a particular reference to the European Union and in some cases to less economically developed countries.