Digitalization has transformed the way businesses operate and interact with their customers, suppliers, and governments. It has also created new challenges and opportunities for tax policy and administration. By using a literature review, this paper examines the effects of digitalization on tax in three countries: The UK and Hungary. It analyzes how these countries have adapted their tax systems to cope with the digital economy and what the main issues and trade-offs are. The paper concludes that countries need to globalize their tax policies in order to protect their tax bases in the digital economy. For this, they need to work together with international organizations to develop new international tax rules and tools for the digital economy.