Notwithstanding, some argue that with the proliferation and development of the digital economy, many companies earn revenue from consumers abroad, but as they have no physical presence in those foreign countries, they are not subject to corporate income tax there.

As a way of trying to address this concern, the Organization for Economic Cooperation and Development (OECD) has been conducting negotiations with more than 130 countries with a view to adopt an international tax system. The current proposal would require multinational companies to pay part of their income taxes where their consumers or users are located. However, despite the ongoing multilateral negotiations, several countries have decided to move forward with unilateral measures to tax the digital economy. About half of all European OECD countries have announced, proposed, or implemented a digital services tax (DST), which is a tax on selected gross revenue streams from large digital companies.

As these taxes mainly affect US companies, the United States responded with threats of retaliation, namely, by proposing additional tariffs from goods coming from the countries which have adopted DST. The list of target products varies from trade partner to trade partner.

Austria, France, Hungary, Italy, Poland, Spain, Turkey and the United Kingdom have already implemented an STD. Belgium, the Czech Republic and Slovakia have published proposals to enact an STD, and Latvia, Norway and Slovenia have officially announced or shown intention to implement this tax.

The proposed and implemented STDs differ significantly in their structure. For example, while Austria and Hungary only tax revenue from online advertising, others tax base is much broader, such as France and Italy, and could include revenue from providing a digital interface, advertising and transmission of data collected about users for advertising purposes.

Tax rates also vary from 1.5% in Poland to 7.5% in Hungary and Turkey (although the tax rate in Hungary is temporarily reduced to 0%).

These STDs are generally considered to be interim measures until an agreement is reached at the OECD level.

In addition, the European Union (EU) intends to implement its own digital tax starting in 2023.