Taxation of Digital Economy

Taxation of the digital economy involves applying tax laws to companies that operate online or digital services. Since these businesses often generate revenue across multiple countries without a physical presence, governments face challenges in collecting fair taxes. New rules aim to ensure digital companies pay their fair share by taxing digital sales, advertising, and data usage in the countries where customers are located. This helps prevent profit shifting and creates a more equitable system, ensuring digital firms contribute to public services just like traditional businesses. International cooperation is key to developing consistent standards for taxing the digital economy effectively.