The process of digitalization has brought about economic changes which have modified how businesses manage their tax obligations. Digital technologies such as cloud computing and e-commerce platforms and artificial intelligence and data-driven business models have developed to the point where companies can now conduct international business operations without needing to establish extensive physical facilities throughout different nations. The new economic environment requires governments to develop tax systems which address digital business activities because existing taxation frameworks depend on physical location-based economic models. Governments and international bodies work together to reshape their tax regulations which will achieve proper tax assessment for online businesses. Multinational companies use digitalization to obtain high revenue from multiple countries while committing tax evasion through profit movement to nations with lower taxes. The practice of Base Erosion and Profit Shifting (BEPS) together with tax avoidance practices has raised concerns which prompted policymakers to develop new digital taxation control systems. International organizations have initiated global initiatives which advocate for both a worldwide minimum corporate tax and a system that enables countries to collect taxes based on their digital service consumption. These initiatives aim to create a more equitable tax system and prevent revenue losses for governments. The Indian government has established multiple policies which address digital economy tax problems through the implementation of Equalization Levy and Significant Economic Presence (SEP) tax regulations. These reforms attempt to ensure that foreign digital companies contributing to the Indian The research investigates how digitalization affects corporate tax systems while studying the development of worldwide and national tax system responses. The study demonstrates that tax systems require an equitable structure which enables technological progress and digital economic development while ensuring societal equity and transparent government financing.