by Julie Martin
An OECD interim report on tax implications of the digitization of the economy, promised for April 2018, may include discussion of temporary, short-term, tax measures, such as a turnover tax, an OECD official said October 17.
Speaking during an OECD webcast, Pascal Saint-Amans, Director, OECD Centre for Tax Policy and Administration, said the OECD report may include “some form of discussion of what short term solutions would entail.” Such provisions would be designed to serve as stopgap measures until global agreement can be reached on a new international tax system.
Saint-Amans said the OECD work would probably address “many downsides” associated with adopting short-term measures. The OECD’s involvement in crafting such rules could “limit the damages” caused by short-term fixes, should countries decide they need to take that route, though, he said.
Saint-Amans’s comments respond to a recent push by some European Union nations to pursue EU agreement on a temporary tax on digital firm revenue. Countries are frustrated with the current international tax system which allows digital firms to escape taxation and gain competitive advantage coupled with the lack of any sign that international agreement can be reached on a long-term solution. The EU Commission has also weighed in, and is following up with proposals for an EU-wide short-term fix.
Saint-Amans comments echo those made by OECD Secretary-General Angel Gurria at last at weekend’s G20 finance ministers meeting. Gurria urged collective action on the design of any short-term measures, arguing that working together would minimize negative spill-overs.
Saint-Amans said that a November 1 OECD consultation on the the taxation of the digital economy, to be held at the University of California in Berkeley, is likely to feature some prominent attendees, including Lafayette G. Harter, the new US Deputy Assistant Secretary (International Tax Affairs) at US Treasury; the EU presidency of Estonia; as well as several members of the OECD task force on the digital economy. The meeting will be live-streamed on the internet.
Julie Martin
Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.
Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.
Julie can be reached at [email protected].
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