Share with your friends

OECD: Plan for resolving tax challenges of digital economy

Plan for resolving tax challenges of digital economy

The Organisation for Economic Cooperation and Development (OECD) today reported that there is an agreement for a “road map” with regard to resolving the tax challenges arising from the digitalization of the economy and a commitment for continued work toward a consensus-based long-term solution by the end of 2020.


Related content

The OECD release states that 129 members of the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS) have adopted a plan—a “Programme of Work” [PDF 3.76 MB]—that sets out a process for reaching a new global agreement for taxing multinational enterprises.

The plan (adopted at the 28-29 May 2019 meeting of the Inclusive Framework members) calls for intensifying international discussions around two main pillars, and will be presented to the G20 finance ministers for endorsement during their 8-9 June 2019 in Fukuoka, Japan.

The plan explores technical issues to be resolved through the two main pillars.

  • The first pillar will consider potential solutions for determining where tax is to be paid and on what basis ("nexus"), as well as what portion of profits could or should be taxed in the jurisdictions where clients or users are located ("profit allocation").
  • The second pillar will explore the design of a system to determine that multinational enterprises (included in the digital economy) pay a minimum level of tax. This pillar would provide countries with a new tool to protect their tax base from profit shifting to low or no-tax jurisdictions, and is intended to address remaining issues identified in the BEPS initiative.

The Inclusive Framework agreed that the technical work must be complemented by an assessment as to how the proposals will affect government revenue, growth, and investment—and there are political considerations for reaching a comprehensive and unified solution “ideally before year-end” to allow for completion of the work during 2020.

© 2021 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today

Sign up today