- The current international tax system taxes multinationals where production occurs, not where digital users are located, leading to concerns about fair taxation in the digital economy.
- The OECD’s Pillar One proposal aims to require large multinationals to pay some taxes where their consumers are located, potentially replacing national digital services taxes (DSTs).
- Negotiations on Pillar One have stalled, and many European countries continue to implement or propose DSTs, which mainly impact US companies and have led to US retaliatory tariff threats.
- Agreements to roll back DSTs in exchange for Pillar One implementation have lapsed, and trade tensions persist, especially with renewed US threats under President Trump.
- As of April 2026, about half of European OECD countries have implemented, proposed, or announced DSTs, with some repeals contingent on Pillar One’s adoption.
Source: taxfoundation.org
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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