Implementation of the «Two-Pillar Solution» prospects in the international taxation system

Abstract

The world economy has undergone a rapid digital transformation, which has caused critical discussions about the effectiveness of existing international tax systems. Traditional norms and rules are proving insufficient to solve the dynamic challenges associated with the development of the digital economy, where new sources of value creation and innovative business models challenge the established norms of profit distribution and relationships. At the same time, intangible sources of value creation contribute to tax avoidance by transnational corporations. Base Erosion and Profit Shifting (BEPS) rules are becoming a key initiative to counter these challenges. The article identifies the difficulties in reforming the modern international tax system, emphasizing the need for constant dialogue, cooperation, and adaptation to changing economic conditions. A two-step solution is an important tool in the fight against aggressive tax planning. Current discussions highlight the complex nature of the impact of the digital economy on international tax rules. Effective monitoring of the implementation and impact of the two-step solution is critical to areas for improvement, with international cooperation through the OECD playing a central role in this reform process. The BEPS rules are seen as a critical solution in the evolution of international tax policy in overcoming the challenges associated with the digital economy. The success of the implementation of the two-step solution initiative depends on effective cooperation between countries, in particular in the context of agreements on the avoidance of double taxation. The internal adaptability of this tool has the potential to improve the efficiency of the international tax system, as it directly addresses the challenges and conditions of the digital economy.