In response to an OECD Request for Input regarding tax challenges of the digitalized economy, NERA experts Dr. Harlow Higinbotham, Pim Fris, Dr. Vladimir Starkov, and Dr. Emmanuel Llinares argue that the arm’s length standard is relevant in the context of the digital economy just as it is in any industry. The authors argue that the value chain analysis should become an essential tool in applying different concepts of taxation to the digital economy business models.