Global Effort to Reform Digital Economy Taxation: OECD's BEPS Action Plan 1 and Two-Pillar Solution Explained

The challenges of taxing the digital economy have led to international efforts to address issues like nexus, data, and characterization. The OECD's Base Erosion and Profit Shifting (BEPS) project, particularly Action Plan 1, explores solutions such as modifying Permanent Establishment (PE) rules and imposing taxes on digital transactions. The Two-Pillar Solution, involving over 135 countries, aims to reform international tax rules. Pillar One reallocates taxing rights to market countries, while Pillar Two introduces a global minimum corporate tax rate. India has implemented measures like the Equalisation Levy and Significant Economic Presence to address digital taxation challenges.

---

---

---