Tax Challenges Arising From the Process of Business Digitization of Multinational Companies - Analysis of OECD and EU Countries

Abstract

The aim of the paper is to investigate the disproportions in the system of profit taxation at the world level and at the level of the European Union, as well as the analysis of the proposals of the Organization for Economic Cooperation and Development (OECD) and EU countries for the adoption of effective and efficient taxation of multinational companies. With the development of modern forms of business, the globalization of business, the digitization of business, the member countries of the OECD and the member states of the European Union called for an efficient and fair system of taxation suitable for the digital age. By digitizing their operations, numerous multinational companies have clients and create economic value in a country, without having a physical presence there at all. This mismatch, as well as the fact that digital companies generate income mainly from intangible assets, lead to non-taxation of profits from such activities. During the author's research, scientific methods of analysis, synthesis, induction, deduction, generalization and specialization were used, on a selected sample of research within the EU.