With the rise of the digital economy there has been growing policy interest from governments and international organizations on various fronts, including taxation. Despite progress towards a consensus on international tax reform in the context of digitalization through the OECD/G20 Inclusive Framework, a number of countries have proposed and implemented digital services taxes (DSTs) on revenues from specified digital activities. It remains to be seen when and to what extent these will be removed in spite of recent high-level agreement to do so.

The World Economic Forum has conducted interviews and a survey with businesses facing DSTs as well as discussions with experts to understand the incidence and impact of these measures so as to better inform policy decisions.

This white paper first discusses the rise and relevance of digital services trade and corresponding regulatory interest. After summarizing the main tax concerns and initiatives in the context of digitalization it shares insights on various aspects of DSTs and their effects before putting forward some considerations for policy-makers.

This preliminary inquiry into the effects of DSTs on trade, investment and competition highlights the need for further research, including in specific country and regional contexts as well as in relation to various business models and companies.