The emergence and progression of the digital economy has distorted the core principles of international taxation. Foreign multinational companies now have the ability to fundamentally operate in market jurisdictions without having a ―physical presence‖. This poses a various challenges to the current international tax regimes because it enables businesses to have a ―significant economic presence‖ without a taxable nexus. Therefore, it becomes extremely difficult to ―ring-fence‖ the digital economy. The Organisation of Economic Co-operation and Development (OECD) has attempted to address these challenges in Action 1 of its Base Erosion Profit Shifting (BEPS) Plan report entitled ―Addressing the Tax Challenges of the Digital Economy - Action 1: 2015 Report‖. Action 1 recommended a few proposals to address the challenges presented in taxing the digital economy, but they were not agreed upon. In the absence of a consensus on the proposals in Action 1, especially from a direct tax perspective, a number of countries began to explore unilateral measures in order to protect their tax base. South Africa is referred to as the ―getaway to Africa‖ and considering South Africa‘s importance in the global economy, it is imperative to ascertain South Africa‘s approach to taxing the digital economy. This study will assess South Africa‘s approach to taxing the digital economy within the international tax spectrum. This assessment will be based on a review of the unilateral approaches taken by other jurisdictions, to determine whether South Africa has taken the correct stance in not taking direct tax measures so far, as well as to assess whether there is anything else South Africa can do to protect its tax base as it awaits global consensus on the taxation of the digital economy. The observations of this study discovered that the unilateral measures taken by the various countries have caused retaliations by trade partners, impractical implementation issues and has created greater uncertainty. This study affirms that South Africa‘s subtle approach to taxing the digital economy was correct and that the expansion of its current source taxation rules should be considered in order to protect the South African tax base whilst a ―global consensus‖ on taxing the digital economy is still to be reached. / Mini Dissertation (MPhil (International Taxation))--University of Pretoria, 2020. / pt2021 / Taxation / MPhil (International Taxation) / Unrestricted