The Institute of Chartered Accountants of India (ICAI), through its Committee on International Taxation, has released a comprehensive publication titled “Taxation of Digital Economy – A Study” aimed at addressing emerging challenges in taxing digital business models and cross-border digital transactions.
The study examines the rapidly evolving digital economy and its implications for global and domestic tax frameworks. It highlights how digitalisation has transformed traditional business structures, enabling companies to operate and generate value in jurisdictions without significant physical presence. This shift has created complexities for policymakers in allocating taxing rights and ensuring fair taxation.
The publication provides an in-depth analysis of international tax developments, including ongoing global efforts to reform the taxation of digital businesses. It discusses the evolving framework under the OECD/G20 Base Erosion and Profit Shifting (BEPS) project, particularly the Two-Pillar Solution aimed at addressing tax challenges arising from digitalisation of the economy. The study also reviews key international practices and policy responses adopted by various jurisdictions.
In addition, the report examines India’s approach to digital taxation, including measures such as the Equalisation Levy and the concept of Significant Economic Presence. It outlines the legal, policy, and administrative considerations involved in implementing digital taxation rules while maintaining a balance between revenue mobilisation and fostering innovation.
The publication aims to serve as a useful reference for policymakers, tax professionals, researchers, and stakeholders involved in international taxation. By presenting legal analysis, practical insights, and policy perspectives, the study seeks to contribute to informed discussions on designing effective tax frameworks for the digital age.
ICAI noted that with the continued expansion of digital platforms, e-commerce, and data-driven business models, the need for coordinated global tax solutions has become increasingly important. The study underscores the significance of international cooperation, clarity in tax rules, and adaptive policy frameworks to ensure equitable taxation in a digitalised global economy.
The publication is part of ICAI’s ongoing efforts to strengthen professional knowledge and support policy discourse in emerging areas of taxation.
The Handbook can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/03/Taxation-of-Digital-Economy-–-A-Study.pdf
