Widespread digitalization of economies is unsettling the long-standing core principles of international taxation. The 'rootlessness' of highly digitalized businesses, operating across the globe without physical presence, their reliance on intangible assets, and networked multi-sided business models fundamentally challenge an international tax regime built for 20th century brick-and-mortar commerce. In this chapter, we survey the rise of the digital tax agenda and the new interest constellations it is fostering in international tax politics by reviewing the main interests and arguments advanced by different state coalitions in these discussions. We focus in particular on corporate taxation of large tech companies, prompted by rising public concern with the behavior of digital giants like Facebook, Apple, Google and Amazon, which has incited critical political attention to the social contributions of these firms. In this context, we document the fracturing of the historical alliance between Europe and the United States, which underpinned the international tax system throughout the 20th century, and we discuss how increasingly powerful emerging economies with large markets, namely India and China, are reacting to revenue losses from digitalization. New interest coalitions between countries, mainly based on consumer market size and the size of the domestic tech sector, show how digitalization renders the traditional division between "source" and "residence" countries less important, while the continued dominance of the OECD as the organizational focal point of reform attempts informs us how established institutions continue to shape the global political debate on taxing the digital economy.
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