Taxing Data-Driven Value Creation: A Value-Chain Analysis of China’s Digital Economy Taxation

DOI

10.2991/978-94-6239-642-5_41How to use a DOI?

Keywords

data value chain; digital economy; tax system optimization; international tax rules; digital services tax

Abstract

The emergence of data as a core factor of production has exposed fundamental institutional misalignments in traditional tax systems. While existing research often emphasizes platform-based digital taxes, it tends to overlook stage-specific value creation mechanisms across the data lifecycle and their interaction with tax architectures such as China’s VAT-centric system. This paper develops a data value chain decomposition framework, integrated with institutional misfit theory, to analyze tax challenges across five lifecycle stages: collection, storage, processing, transmission, and application. We identify key contradictions between each stage’s value logic and prevailing tax categories (value-added tax (VAT), corporate income tax (CIT), and personal income tax (PIT)). Because generic digital tax reforms do not adequately address these stage-specific distortions, we propose a VAT-first reform pathway that refines withholding mechanisms for cross-border data services and phases in a mark-to-market data-asset tax (DAT) under CIT, offering a pragmatic option for developing economies alongside the OECD’s Two-Pillar Solution.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Ruohong Liu
AU  - Zhe Fang
PY  - 2026
DA  - 2026/04/29
TI  - Taxing Data-Driven Value Creation: A Value-Chain Analysis of China’s Digital Economy Taxation
BT  - Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)
PB  - Atlantis Press
SP  - 413
EP  - 419
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-642-5_41
DO  - 10.2991/978-94-6239-642-5_41
ID  - Liu2026
ER  -