Taxation of multinational companies in the digital economy: current outlook

Along with the development of the digital economy, the shifting of profits by large multinational companies into lower-tax territories (and the subsequent erosion of tax bases) poses a challenge for the design of international, coordinated tax policies that obstruct tax avoidance in territories where economic benefits are generated. The chapter provides an overview of the work and regulation being carried out by the Organisation for Economic Co-operation and Development (OECD) and the European Union (EU) to ensure that the taxation of multinational companies - and not only companies providing digital services - occurs in those territories where value is generated. An overview is also given of national legislation being adopted by some countries in order to tax the provision of certain digital services, thereby mitigating erosion of the collection of revenues while a consensus resolution (which may be long in arriving) is decided at the global level.