Digitalization enables companies to interact with users and the economy of a country without establishing a physical presence there. Unique, intangible assets make it difficult to apply the arm’s length principle in determining how to value transactions between related entities in different countries. Tax competition among countries and remaining opportunities for profit shifting to low tax jurisdictions have raised concerns.
As countries seek to reform international corporate tax rules to address these issues, this paper supports informed debate among non-experts. It has been produced with the input of a diverse group of individuals representing governments, corporations, civil society organizations, and academia.