Digital Taxation Whitepaper

September 2022

The digital economy has transformed the way businesses operate and has posed challenges to traditional international tax rules. These challenges include the mobility of the digital economy and its heavy reliance on intangible, digitalization’s exacerbated base erosion and profit shifting (BEPS) issues, and the existing international tax rules.

The international tax community has been working to address the tax challenges of the digital economy, and has released two proposals:

• The OECD’s BEPS 2.0 proposal, which includes a two-pillar solution to tax the digital economy and solve any remaining BEPS issues.
• The UN proposal, which aims to attribute more taxing rights to source jurisdictions over specific “Automated Digital Services”.

This study compares the two proposals and analyzes their potential effectiveness in addressing the specific tax challenges of the digital economy.