was designed for firms with factories in identifiable places.
Digital businesses hold their value in that can be registered anywhere.
A licence fee paid by a to its parent moves profit across a border without moving anything else.
The practice was legal, widely advised and describable in a footnote.
Two responses have emerged, and they pull in different directions.
Digital services taxes charge a percentage of local revenue regardless of declared profit.
They are simple to administer and fall on , which loss-making firms also have.
A global minimum rate takes the opposite approach and removes the incentive to shift.
If profit is taxed at fifteen percent somewhere, booking it in a zero-rate gains nothing.
Implementation is where the agreement becomes fragile.
A minimum works only if the large economies apply it in the same year.
Developing countries argue, with justification, that the design favours where firms are rather than where users are.
Their tax base is consumption, and the rules allocate rights by production.
Any durable settlement has to allocate some taxing right to the market country.
Until it does, measures will keep reappearing, which is exactly what the agreement was meant to prevent.