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BEPS Action 1

Address the tax challenges of the digital economy

Description of this action in OECD's Action Plan (July 2013)

Identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach and considering both direct and indirect taxation. Issues to be examined include, but are not limited to, the ability of a company to have a significant digital presence in the economy of another country without being liable to taxation due to the lack of nexus under current international rules, the attribution of value created from the generation of marketable location-relevant data through the use of digital products and services, the characterization of income derived from new business models, the application of related source rules, and how to ensure the effective collection of VAT/GST with respect to the cross-border supply of digital goods and services. Such work will require a thorough analysis of the various business models in this sector.

Expected output and deadline for this action in OECD's Action Plan (July 2013)

Expected output : Report identifying issues raised by the digital economy and possible actions to address them

Deadline : September 2014

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