G7 finance ministers open to tackling tax challenges of digitalization

G7 finance ministers and central bank governors, following their May 12–13 meeting in Bari, Italy, said they may be able to back policy measures designed to ensure that tax challenges associated with the digitalization of the economy are addressed in a consistent manner.

The G7 officials —  from Canada, France, Germany, Italy, Japan, UK, and US — said in a communiqué that their support for such measures will depend on the contents of a interim report of the OECD Task Force on the Digital Economy (TFDE), expected to be released prior to the IMF and WBG meeting in spring 2018.

The ministers expressed support for the work of the OECD and the IMF on tax certainty and praised ongoing efforts to implement the G20/OECD base erosion and profit shifting (BEPS) project.

The ministers encouraged countries to commit to implement the BEPS package and join the G20/OECD Inclusive Framework on BEPS. They also said they looked forward to the June 7 signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS.

Timely, consistent, and widespread implementation of BEPS project is crucial to achieving globally fair and modern systems and a global level playing field, the officials said.

The G7 ministers further called on all jurisdictions to sign and ratify the multilateral Convention on Mutual Administrative Assistance in Tax Matters and implement the Common Reporting Standard on automatic exchange of financial account information.

“We . . . look forward to the OECD’s preparation of a list of non-cooperative jurisdictions with respect to tax transparency, which will guide our work on defensive measures against listed jurisdictions,” the ministers said.

The officials also agreed that improving developing countries’ capacity in tax policy and administration is key to a global level playing field and reaffirmed their support for the  work of the Platform for Collaboration on Tax in this area.

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