One of the mantras of the OECD's Base Erosion and Profit Shifting (BEPS) project is the need to update the international tax rules to deal with modern business and especially the explosive growth of digital services. After all, no one foresaw the internet in the 1930s.

Various European countries – notably France and Italy – have become greatly exercised by the potential for digital services to be provided from outside their territory without any tax being levied on the supposed profits generated. With that background, both the EU and the OECD are looking specifically at the tax position of digital services.