Tax Challenges of Digitization

Insights from KPMG about the potential impact of proposed reforms on the taxation of the digital economy

Brett Weaver

Brett Weaver

IMPACT Tax Lead, KPMG LLP

+1 206-913-6697
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The challenge of how to tax the digital economy was identified in the OECD's BEPS initiative as Action 1: Addressing the Tax Challenges of the Digital Economy. While intergovernmental groups, including the OECD, are trying to build a consensus around taxation of the digital economy, some countries are taking unilateral actions, such as imposing digital services taxes. As the digitization tax debate continues, multinational companies will need to stay abreast of both short- and long-term developments to navigate and prepare successfully for the resulting changes to the global tax landscape.

Pillar One Blueprint

KPMG Report: Summary and Initial Analysis

KPMG Report: Summary and Initial Analysis

Pillar Two Blueprint

KPMG Report: Summary and Initial Analysis

KPMG Report: Summary and Initial Analysis

TaxNewsFlash

Digitalized Economy developments edition

Digitalized Economy developments edition

Podcast | Between Two Pillars: The U.S. at the OECD

April 28, 2021

There’s plenty of activity on the domestic front in terms of international tax reform. And, it’s all taking place in the context of a wider global movement to coordinate the taxation of multinational enterprises. This podcast explores the latest OECD action on Pillars One and Two and considers how aspects of these proposals relate to current proposals in the White House “Made in America Tax Plan.”

Pillar One: Profits Allocations and Nexus
One-page summary of Pillar One, which aligns taxing rights with local market engagement. If multinational consensus on this is not achieved, unilateral digital taxation measures may continue to proliferate.
Pillar Two: Global Minimum Taxation
One-page summary of Pillar Two, which applies where, even after the effect of Pillar One (if any), where multinationals are regarded as undertaxed by reference to an agreed minimum level of taxation.
BEPS 2.0 – Assessing the Impact on Your Organization (KPMG BEPS 2.0 Model)
International Tax professionals from across the global organization of KPMG firms can help clients understand, communicate, and evaluate appropriate actions in light of the BEPS 2.0 initiative. They can assist in analyzing how the proposals may affect your organization and give you the insights you need to communicate with senior executives, audit committees, and other stakeholders using the KPMG BEPS 2.0 Model, a proprietary modeling tool.
Off the MAP: Dispute Resolution in the BEPS 2.0 Blueprints
January 11, 2021 | In this article, the authors examine the dispute prevention and resolution mechanisms discussed in the OECD's pillar 1 blueprint for taxing the digital economy. | Tax Notes Federal
Digital Services Tax: Why the World Is Watching
January 6, 2021 | In response to digital services taxes (DSTs) that have been proposed by the European Commission and a number of countries, the United States has threatened to impose retaliatory tariffs, arguing that DSTs unfairly target U.S. multinational corporations. This article summarizes the various DST proposals globally and discusses potential duty mitigation strategies should the United States choose to respond with retaliatory tariffs. | Bloomberg Tax

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