The OECD has issued a discussion draft on the tax challenges of the digital economy, as part of its BEPS work. The paper examines the challenges posed, mentioning mobility, networks and the value of data as significant factors. It suggests a number of possible solutions, including changes to the permanent establishment rules as well as withholding and consumption tax solutions. The Ottawa principles should serve as a framework for evaluating the various options. The digital economy cannot be considered in isolation from the other BEPS issues, but within the tight BEPS timetable it is likely that the way forward will become clear before too long. The OECD requests that comments on the paper be submitted by 14 April.
