The Organisation for Economic Cooperation and Development (OECD) proposes a two-pillar approach to address the tax challenges of the digitalisation of the economy. Pillar One focuses on the allocation of taxing rights and seeks to undertake a review of the profit allocation and nexus rules. The proposed reallocation of taxing rights would strengthen the taxing rights of market countries and weaken the tax position of the resident states.

Pillar Two of the proposals addressing the tax challenges of the digitalisation of the economy seeks to develop measures which ensure that corporate profits are subject to taxation at an effective minimum rate. The underlying assumption is that the characteristics of the "digital economy" allow profits to be shifted to low-tax countries and therefore justify limiting tax competition to a minimum level.