Digitalization And International Taxation: Significant Challenges Before Nations In Combating Base-Erosion And Profit Shifting

Atul Sharma & Divyansh Shandilya, Vivekananda Institute of Professional Studies, Delhi Affiliated to Guru Gobind Singh Indraprastha University

ABSTRACT

This article provides a thorough analysis of the difficulties presented by digitization to international taxation arrangements, with a specific focus on the issue of base erosion and profit shifting (BEPS) carried out by multinational enterprises (MNEs). The author thoroughly examines past examples and current trends to explain the need for change in response to changing business models. The focal point of this discussion is the OECD's Two-Pillar Solution, which aims to readjust the allocation of taxing authority and implement a worldwide minimum corporate tax rate. The article assesses the effectiveness and consequences of these suggested reforms by utilising legal concepts, empirical evidence, and expert opinions. This highlights the importance of global collaboration in dealing with the intricacies of taxing across borders and supports a principled approach based on fairness and openness. This essay enhances comprehension of the changing international tax law by thoroughly analysing its legal and policy aspects.