Addressing the Tax Challenges of the Digitalization of the Economy – OECD Publishes Consultation Document

    View Author February 2019

    The OECD’s Inclusive Framework on BEPS has set out several proposals for long-term solutions to the tax challenges arising from the digitalization of the global economy. Those challenges have led to a reexamination of some of the fundamental principles that underpin the current system of international tax, including, in particular, how to determine when a business has a taxable presence in a given jurisdiction and how much profit should be allocated to the activities conducted there. In addition, the consultation considers two interlocking rules to combat base erosion and profit shifting concerns exacerbated by digitalization.

    This client update explores the OECD’s proposals and outlines next steps.