Release of discussion draft on Action 1 (Tax Challenges of the Digital Economy) of the BEPS Action Plan


24/03/2014 - Public comments are invited on a discussion draft on the Tax Challenges of the Digital Economy.

In July 2013, the OECD published its Action Plan on Base Erosion and Profit Shifting. The Action Plan identifies 15 actions to address BEPS in a comprehensive manner and sets deadlines to implement these actions. Action 1 reads as follows:

 Action 1

Address the tax challenges of the digital economy


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 characterisation 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.


The Action Plan also provided that “[t]he OECD’s work on the different items of the Action Plan will continue to include a transparent and inclusive consultation process” and that all stakeholders such as business (in particular BIAC), non-governmental organisations, think tanks, and academia would be consulted.

As part of that consultation process, interested parties are invited to send comments on this discussion draft, which includes the preliminary results of the work carried out in relation to Action 1 of the BEPS Action Plan.

Comments on this discussion draft should be submitted electronically (in Word format) before 5.00pm on 14 April (no extension will be granted) to [email protected].

It is the policy of the OECD to publish all responses (including the names of responders) on the OECD website.


Please note that the draft proposals set out in this document do not represent the consensus views of either the Committee on Fiscal Affairs or its subsidiary bodies but rather are intended to provide stakeholders with substantive proposals for analysis and comment.


Public Consultation:

Persons and organisations who intend to send comments on this discussion draft are invited to indicate as soon as possible, and by 7 April at the latest, whether they wish to speak in support of their comments at a public consultation meeting on Action 1 (Address the tax challenges of the digital economy), which is scheduled to be held in Paris at the OECD Conference Centre on 23 April 2014. Persons selected as speakers will be informed by email by 11 April at the latest.

This consultation meeting will be open to the public and the press. Due to space limitations, priority will be given to persons and organisations who register first (we reserve the right to limit the number of participants from the same organisations). Persons wishing to attend this public consultation meeting should fill out their request for registration on line as soon as possible and by 7 April 2014 at the latest. Confirmation of participation, including venue access details, will be sent by email to participants by 11 April at the latest.

This meeting will also be broadcast live on the internet and can be accessed on line. No advance registration is required for this internet access.


» 18/04/2014 update: Download the agenda