Sales turnovers, profits, hence taxes collected from businesses operating in digital economy are rising worldwide, including the EU. This arises additional challenges for different tax administrations on how to tax profits of such businesses as their operational models no longer fit in traditional taxation models. Consequently, the question is how to attribute fair amount of profits of such businesses to respective jurisdictions. This is due the fact that businesses operating in digital economy have critical differences in their business models compared to the ones operating in traditional economy as further discussed in the research paper. Changing business models outline the need for new principles for taxation of such businesses to achieve fair taxation as recently pointed out by the European Commission. Different businesses are operating in digital economy, such as, ride-to-hire companies, e-commerce retailers and social networks etc. This research paper focuses specifically on corporate income taxation of e-commerce platforms. The research paper in more detail outlines the methodology used to determine key profit drivers of e-commerce platforms. It should be specifically stressed that from upstream sources as per traditional business models, e-commerce platforms have changed its operations to downstream sources—i.e. customers. Subsequently, as finding suggested that the most appropriate method for determination of profits to be taxed by each jurisdiction is profit split method, application of the method was simulated. Similar ideas and approaches on how to tackle issues arising from corporate income taxation on businesses operating in digital economy also are supported by the Organization of Economic Cooperation and Development member states as well as researches.