For several years there have been efforts at international, EU and national levels to reform taxation to ensure that profits are taxed where economic value is created. 

At an international level, work revolved around the Organisation for Economic Co-operation and Development (OECD) which in 2013 launched its Base Erosion and Profit Shifting (BEPS) Action Plan with a process aimed at countering certain strategies used by multinationals to reduce their tax burden. On 9th October 2019 the OECD published its 'unified approach' for public consultation, with the aim of arriving at a consensus, so as to develop a solution for its final report to the G20 in November 2020 in Saudi Arabia. After years of debate, this initiative leaded to the existence of Pillar Two.

However, in the meantime, at EU level, the European Commission tried to address the tax strategies of multinationals through a proposed harmonised set of rules, known as the “Digital Tax Package", to tax companies rather than leaving it to individual EU Member States. Despite attempts to reach an agreement, EU Member States have been unable to reach a compromise on their own proposals and focussed again on a global agreement. This deadlock has led several EU Member States to introduce their own initiatives for national taxes, namely the so-called Digital Services Tax (DST). Also, non-EU countries have introduced a DST. As a result, the taxation of the digital economy ended in a fragmentate landscape. All these initiatives may therefore potentially lead to double taxation and differing views of the transactions covered, and have also increased tensions at the global political level.