Law students at Dutch universities are required to write a thesis in fulfillment of the requirements for their LLM programme. For many students, the question what research to undertake is currently at the top of their minds. In this blog I aim to provide some inspiration for finding a suitable thesis topic in the new field of tax and technology.

The digital transformation of society begs new questions about the relation between rules and real life. Innovative technologies have changed the way how people interact and how businesses trade. These disruptions have their effects in the realm of taxation in raising new questions as well as bringing dreams of potential solutions. Researching these questions and writing about these dreams can be approached from two perspectives: ‘Taxation of Technology’ and ‘Technology for Taxation’.

Taxation of Technology

The first angle to tax and technology asks broadly how should tax rules cope with digital transformation of society? This is the tax perspective on technology. The focus is on finding answers in tax rules for questions that arise as a result of technological disruptions. It is the question how should states allocate taxing rights over international digital trade? How do we fit the sharing and gig economy in our tax systems? What is the tax accounting value of data?

Many of these questions are also discussed at the level of international organizations. These organizations also propose solutions. Take for example the OECD’s ‘Secretariat Proposal for a Unified Approach under Pillar One’. Although the time frame for public consultation does not allow to submit your still to be written thesis to the OECD, that should not stop you from taking this proposal as inspiration for a thesis topic.

"You thus do not have to rethink the complete international tax system to be able to contribute to knowledge on taxation of technology; very specific technical issues can result in great theses that display your multidisciplinary knowledge!"

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Another unrelated example is the following. One of my current thesis students has almost completed her thesis on the Dutch taxation of cryptocurrencies. One of the more difficult issues that were yet unanswered in prior research was what valuation method should businesses apply to cryptocurrencies that they hold. The choice for the appropriate valuation method is especially important given the volatility of cryptocurrencies’ values and the difficulties in establishing their fair market value objectively. You thus do not have to rethink the complete international tax system to be able to contribute to knowledge on taxation of technology; very specific technical issues can result in great theses that display your multidisciplinary knowledge!

Technology for Taxation

The second perspective focuses on treating technology as an answer to the questions of taxation. We look at taxation from a technology angle.

Tax administrations are essentially data processors that use personal data to compute tax liabilities of taxpayers. The OECD says that the use of digital technologies is set to increase tax compliance. New technologies have fundamentally changed the way how data is gathered (digital tax returns, SAF-T), how communications with taxpayers are done (personal website, pre-filled returns), how compliance is monitored (machine learning methods to detect likely underreporting), and how data is shared internationally between administrations (automatic exchange through CRS/CbC/tax ruling XML schemas). This also opens an exciting box of new questions on privacy, data protection and cybersecurity. Be creative in investigating how technology can improve taxation processes and administration in other ways!

"A thesis is a marathon in academic research and writing, so you better make sure that you like your running route!"

Another possibility is to apply computational methods to investigate taxation problems. In my prior research for example, I have applied the method of network analysis to research the body of tax case law by the CJEU. I applied algorithms to investigate what the most central rulings are and to track how the CJEU developed its arguments and lines of reasoning in later cases. With a little instruction in network analysis, many of my students have been able to carry out similar studies for their theses.

Final word of advice

Whatever perspective you take on tax and technology, make sure that it motivates you to keep writing. Your choice depends largely on your comfort zone and to what extent you want to step beyond it. Whatever topic you choose, make sure that it captivates your interest and is fun for you to research. A thesis is a marathon in academic research and writing, so you better make sure that you like your running route!

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