This article surveys the evolution of the discussion on tax and digitalization between 1996 and 2018, analysing the shifts in thinking over this period and their impact going forward. Particular attention is given to four themes that emerge in this discussion. These are the changes in thinking on: the conceptual basis for the allocation of taxing rights; suitability concerns about the existing international tax rules; concerns about international tax avoidance; and concerns about tax competition between states. The impact of the increasing importance of developing countries on the digitalization debate is also considered. What emerges from the analysis is that there have been significant shifts in how the tax issues raised by digitalization have been framed and addressed by the OECD and the delegate states involved in the process. The chief consequence of the approach adopted is that there has never been a completely clear and consensus-based analysis of the problem (or problems) for which a solution is sought, which also includes the rationale and objectives of any required response. This goes a long way towards explaining the diverse (and, arguably, contradictory) threads that are combined in the two-pillar approach currently pursued.
