A UN draft protocol dated May 5 would allow countries to tax digital companies like Google, Amazon, and Meta based on where their users are located, rather than where the companies are incorporated. The text covers online advertising, search, social media, cloud computing, gaming, and user data supply. It sits within the UN Framework Convention on International Tax Cooperation and is scheduled for negotiation in New York in August. India, Brazil, and a bloc of African and Asian nations support source-based digital taxation, while the US has historically opposed such measures. The draft is seen as a signal that many countries are no longer waiting for the stalled OECD Pillar One process. Key details like allocation formulas and withholding rates remain unresolved.
