The Organisation for Economic Co-operation and Development (OECD) is in the midst of a project intended to tackle the tax challenges arising from the digitalization of the economy. As initially laid out in its program of work released in May 2019, the goal is to develop consensus on a new taxing right that would allow countries to tax multinationals even in the absence of traditional physical presence. In this paper, the authors argue that upon inspection, the plan seems primarily focused on rebalancing taxing rights mostly among a number of OECD member states plus a few other key non-OECD states, and that, viewed from this perspective, the urgent effort to forge a new global tax deal for the digital age risks deferring a much-needed discussion on the broader distributive implications of the current global tax deal to some unspecified future time. The first part of the paper offers a brief survey of some of the main factors that prompted the OECD to turn its attention to this topic. The second part considers the origins and development of nexus in the international tax regime, showing why this concept is amenable to broad expansion. The third part examines the range of reforms currently under consideration, arguing that the framing on digitalization misses a necessary connection to other pressing international policy programs that are also under development, most notably a global commitment to building institutions that support sustainable economic development. The paper concludes with a prediction that on its current trajectory, the program of work on digitalization is likely to produce a new global tax deal that looks much like the old global tax deal, with a relatively modest redistribution of taxing rights among a few key states, thus missing an opportunity for meaningful reform.
Archiving Dossier Narrative: Transcribing "Le Pelerinage de Damoiselle Sapience"
