Episode 4: Digitalisation of the economy

The wide impact of pillars 1 and 2

There has been a lot of discussion in recent months about the digitalisation of the economy, and its potential to change the fundamentals of today’s international tax framework through pillars 1 and 2.

 We’ve now entered the final stretch. On 12 October, the OECD released almost 500 pages on the technical background to the tax challenges arising from the digitalisation of the economy. They are seeking input by December 2020 for a public consultation, and have set a deadline for international agreement by mid-2021.

In this episode we outline the framework set out in the pillar 1 and 2 blueprints, discuss how OECD initiatives differ from some of the other commonly referenced measures (such as digital service taxes), and focus specifically on key elements where this may impact a wide range of businesses beyond those traditionally thought of as digital businesses.