OECD’s consultation on the tax challenges of digitalisation

The OECD has issued its public consultation document on taxing the digital economy. The paper sets out three proposals for revising the profit allocation and nexus rules: user participation; marketing intangibles; and significant economic presence. The document also sets out two proposals to address global anti-base erosion by ensuring that internationally operating businesses pay a minimum level of tax, namely: an income inclusion rule; and a tax on base eroding payments. The aim is to find an international consensus. Given the unilateral actions of countries introducing their own stand-alone solutions, time is short.