The OECD has published its ‘interim’ report on challenges the digital economy poses for the international tax system. The report highlights clearly the differences that still exist between countries over the action needed.
The OECD has published its ‘interim’ report on challenges the digital economy poses for the international tax system. The report highlights clearly the differences that still exist between countries over the action needed. These range from the view that no action is needed, to those seeing a need to focus on data and user contributions, through to others who insist that any changes should apply to the economy more broadly. The report confirms that OECD inclusive framework members will undertake a review of the ‘nexus’ and ‘profit allocation’ rules, for determining taxing rights and how profits are shared between jurisdictions, as part of the work towards developing an international consensus for its final report in 2020.
The report builds on the 2015 BEPS Action 1 report, and includes an in-depth analysis of the changes to business models and value-creation arising from igitalization. The OECD notes the desire among some countries, including the EU, to act quickly and introduce interim measures, while others consider such measures will give rise to risks and adverse consequences. In a statement responding to the report, the US treasury secretary has declared his opposition to ‘proposals by any country to single out digital companies’.
The report also looks at how igitalization is affecting other areas of the tax system, including the opportunities new technologies, such as online platforms, offer for enhancing taxpayer services and improving compliance. It also considers transparency risks from the block chain technology that underlies crypto-currencies.
OECD Secretary-General, Angel Gurría, presented the report to the G20 finance ministers at their meeting this week in Buenos Aires. ‘We have underlined the complexity of the issues, and highlighted the importance of reaching international agreement, both for our economies and the future of the rules-based system’, Gurría said. ‘The OECD stands ready to accompany countries as they seek to build a common understanding of the issues related to the digital economy and taxation, as well as the long-term solutions’.
The OECD has published its ‘interim’ report on challenges the digital economy poses for the international tax system. The report highlights clearly the differences that still exist between countries over the action needed.
The OECD has published its ‘interim’ report on challenges the digital economy poses for the international tax system. The report highlights clearly the differences that still exist between countries over the action needed. These range from the view that no action is needed, to those seeing a need to focus on data and user contributions, through to others who insist that any changes should apply to the economy more broadly. The report confirms that OECD inclusive framework members will undertake a review of the ‘nexus’ and ‘profit allocation’ rules, for determining taxing rights and how profits are shared between jurisdictions, as part of the work towards developing an international consensus for its final report in 2020.
The report builds on the 2015 BEPS Action 1 report, and includes an in-depth analysis of the changes to business models and value-creation arising from igitalization. The OECD notes the desire among some countries, including the EU, to act quickly and introduce interim measures, while others consider such measures will give rise to risks and adverse consequences. In a statement responding to the report, the US treasury secretary has declared his opposition to ‘proposals by any country to single out digital companies’.
The report also looks at how igitalization is affecting other areas of the tax system, including the opportunities new technologies, such as online platforms, offer for enhancing taxpayer services and improving compliance. It also considers transparency risks from the block chain technology that underlies crypto-currencies.
OECD Secretary-General, Angel Gurría, presented the report to the G20 finance ministers at their meeting this week in Buenos Aires. ‘We have underlined the complexity of the issues, and highlighted the importance of reaching international agreement, both for our economies and the future of the rules-based system’, Gurría said. ‘The OECD stands ready to accompany countries as they seek to build a common understanding of the issues related to the digital economy and taxation, as well as the long-term solutions’.
