Taxing Collaborative Software Engineering

04/13/2023

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by   Michael Dorner, et al.

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The engineering of complex software systems is often the result of a highly collaborative effort. However, collaboration within a multinational enterprise has an overlooked legal implication when developers collaborate across national borders: It is taxable. In this short article, we discuss the unsolved problem of taxing collaborative software engineering across borders. We (1) introduce the reader to the basic principle of international taxation, (2) identify three main challenges for taxing collaborative software engineering, and (3) estimate the industrial significance of cross-border collaboration in modern software engineering by measuring cross-border code reviews at a multinational software company.