Following their summit in Charlevoix, Quebec, Canada, held June 8–9, six of the seven G7 leaders pledged to continue to work toward reaching agreement on the taxation of digital multinationals, to collaborate to achieve fair taxation, and continue their efforts to implement OECD/G20 base erosion profit shifting (BEPS) plan agreements.
A March OECD interim report revealed that countries differ on whether the international tax rules should be updated to take into account the unique features of digital multinationals, with some, such as France, saying yes; others saying no; and still others, such as the US, agreeing that there is a potential need to update the international tax rules for allocating income among countries, but disagreeing that the discussion should be limited to taxation of digital firms.
The G7 leaders, following their summit, pledged to continue to try to resolve these differences.
“The impacts of the digitalization of the economy on the international tax system remain key outstanding issues. We welcome the OECD interim report analyzing the impact of digitalization of the economy on the international tax system. We are committed to work together to seek a consensus based solution by 2020,” said a communique, which signed by Canada, France, Germany, Italy, Japan, and the UK, but not the US, due to an unrelated trade dispute.
The leaders also agreed to collaborate more closely to ensure fair taxation.
“In order to ensure that everyone pays their fair share, we will exchange approaches and support international efforts to deliver fair, progressive, effective and efficient tax systems,” they said.
The six leaders also reaffirmed their commitment to implementing the BEPS plan agreements and fighting tax evasion.
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