The Organization for Economic Co-operation and Development (OECD) has issued a discussion draft on Action Item 1 (Tax Challenges of the Digital Economy) of the base erosion and profit shifting (BEPS) Action Plan.
The BEPS Action Plan Item 1 aims to look at the main difficulties that the digital economy presents for the application of the current international tax code and to draw up detailed options to deal with the problems arising for direct and indirect taxation.
The main tax challenges arising from the digital economy identified by the OECD include issues concerning taxpayer location, taxation of data, classification of supplies and collection of VAT.
