Tax Revenue Loss in the Digital Economy

The rapid development of the digital economy poses severe challenges to the traditional tax system. New business models such as cross - border data flows, virtual transactions, and platform economies have made issues like tax source definition, tax jurisdiction, and profit allocation increasingly complex. This paper analyzes the main impacts of the digital economy on tax collection and administration, including tax base erosion, intensified tax competition, and the reduced applicability of the traditional permanent establishment principle. Meanwhile, it explores the reform plans of the international community to address digital economy tax issues, such as the “Two - Pillar” framework (global minimum tax rate and profit reallocation rules) proposed by the OECD, as well as the practices of various countries in digital service taxes (DST). Finally, this paper puts forward suggestions for improving digital economy tax policies, including strengthening international coordination, optimizing tax jurisdiction rules, and promoting digital tax collection and administration, so as to promote tax fairness and sustainable economic development.