Some digital businesses are able to provide digital services remotely to customers around the world using little to no infrastructure of their own, yet they gain substantial value from interaction with users. This can lead to imbalanced economic value distribution, particularly in tax payments, which impacts governments’ abilities to fund essential services in developing countries.
Taxation, critical to achieving SDG target 17.1 on resource mobilisation, is increasingly challenged by digitalisation, prompting global efforts like the OECD/G20 framework to address these issues. Digital companies need to be transparent about their global economic value generation and distribution. Inaction on the part of companies only serves to strengthen reasons to be critical of them and harms their reputations. Moreover, without vibrant and growing economies across the globe, digital companies will find it increasingly challenging to sell their goods and services.



Research Guidance:

This element requires companies to disclose income taxes paid in a manner that reflects the geographical distribution of their activities. The company discloses a break-down of income taxes on a country-by-country basis. For companies operating in a single country, disclosures should provide a provincial breakdown.