Transfer Pricing in Digital Services: A Comparative Study of North American Taxation Policies

Abstract

The rise of digital services has revolutionized global business operations, necessitating a reevaluation of traditional tax and transfer pricing policies. This paper investigates the evolving landscape of transfer pricing in digital services, with a particular focus on the comparative taxation policies of North America, including the United States, Canada, and Mexico. The digital economy presents unique challenges for taxation authorities, particularly in addressing the intangibility of digital services, the geographical mobility of digital service providers, and the complexities of valuing intellectual property (IP). This research aims to provide a comprehensive understanding of how North American countries have adapted their taxation frameworks to account for digital services and their approach to enforcing transfer pricing regulations within multinational enterprises (MNEs). By comparing these frameworks, the study identifies gaps, inefficiencies, and best practices that could lead to more harmonized and effective tax systems in the region.