Globalisation has brought major benefits for businesses, but at the same time it has enabled large multinational firms to book their profits in countries with low or no tax, rather than where they carry out their business activity. Governments lose out because shifting profits in this way can erode the tax base. Moreover, the digital economy adds to the challenge of working out how much international companies owe in tax and to which countries, in part because digital firms may not have a physical presence in the places they do business in. The OECD, which launched the Base Erosion and Profit Shifting (BEPS) initiative in 2013, has been leading international talks to address these issues, and is aiming towards a landmark agreement on new tax rules in 2021. Grace Perez-Navarro, deputy director of the OECD Centre for Tax Policy and Administration, explains the issues.