UN Tax Committee Discusses the Digitalised and Globalised Economy

On 23 March 2026 the UN Committee of Experts on International Cooperation in Tax Matters discussed the workstreams on the taxation of the digitalised and globalised economy. The relevant subcommittee presented its planned workstreams for comment and approval.

The subcommittee on the digitalised and globalised economy is mandated to prepare an evaluation report on the treatment of service PEs in the UN Model. This workstream will be considered by a subgroup with a view to producing a report to be presented to the next session of the Tax Committee in the autumn of 2026.

Another subgroup on emerging technology will consider the issue of services in relation to emerging technologies such as AI, machine learning and the internet of things. The subgroup will look at whether the issues are adequately covered by the UN Model and suggest updates where needed.

A second phase of work, to be commenced after the 33rd session of the Tax Committee in autumn 2026, will aim to prepare an Implementation Guide on the services-related provisions in the UN Model. This will cover issues such as treaty negotiation, domestic law implementation and administrative aspects. The focus will be on practical clear guidance for developing countries, using examples to illustrate the issues. The Implementation Guide will be completed by the spring of 2028.

Participants in the meeting suggested that in Article 12B of the UN Model the definition of automated digital services will need to be updated. Now AI plays an increasingly important role in the provision of services, and the definition must be adjusted to allow for this. With the use of AI, there are various levels of human interaction in providing services. The increasing use of AI must also be analysed in the context of the evaluation report. Also, there may be a need for follow-on work after the completion of the evaluation report.
It was also noted that there are currently discussions in UN Framework Convention in relation to a Protocol on the taxation of services. Also, the OECD has been looking at these issues. The Tax Committee must therefore avoid duplication of work.

A suggestion was made for the creation of a repository of economic analysis for developing countries. This economic analysis could help to show how an economic policy would impact their fiscal take and the global fiscal take. Reference was made to a recent International Chamber of Commerce (ICC) report on the economic impact of Article 12AA of the UN Model, in terms of the tax collection from cross-border services.

The co-coordinators confirmed that the Article 12B definition of automated digital services would need to be reviewed. They also noted that discussion of the nexus for taxation of services would cover the possibility of a broader nexus than currently used. In relation to the possibility of duplication of work with other forums, the co-coordinators noted that they have a separate mandate for their work, and discussions therefore have a separate objective.

The workplan of the subcommittee was approved by the Tax Committee.