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The digital economy brought about new challenges in the field of international tax law. The traditional concept of permanent establishment that plays the main role in the allocation of active business income between the state of residence and state of source is currently based on a certain degree of physical presence in the host country. Consequently, the income derived from a number of digitally provided services may not be taxed in the source (market) jurisdictions under the current distributive rules. There is consensus that the current legal framework of international taxation is no longer adequate due to the emergence of new business models and the proliferation of digitalization and they are in need of reforms.

Both at international level and at the level of the European Union, there are plans as to how to achieve the fair and equitable taxation of the taxpayers being engaged in the digital economy.

The conference focuses on the three proposals of a particular importance:

• The directive proposal of the EU Commission as an interim solution on the common system of a digital services tax on revenues resulting from the provision of certain digital services;
• The long-term solution of the EU Commission, that is, its directive proposal on laying down rules relating to the corporate taxation of a significant digital presence;
• The Public Consultation Document “Secretarial Proposal for a ‘Unified Approach’ under Pillar One” published under the auspices of the OECD, aiming at the modification of current transfer pricing rules (Pillar I proposal).