The OECD today released an outline of an interim report for G20 Finance Ministers on the tax challenges that countries face because of digitization and on potential options to address these challenges.
The OECD also requested public input to assist in the further development of the report, which will be delivered to the G20 ministers in April 2018.
Comments are requested on a variety of topics, including on potential options to modify the international tax rules to more appropriately tax the digital economy which were mentioned in the 2015 final OECD/G20 Base Erosion and Profit Shifting (BEPS) report under Action 1.
These options include adding a new tax nexus concept to the international tax rules based on “significant economic presence,” establishing a withholding tax on some types of digital transactions, and providing for a digital equalization levy, such as the levy under consideration by at least 10 EU states.
While not recommending that countries adopt any if these three measures, the 2015 BEPS Action 1 report suggested that countries consider adopting them.
Comments are sought also on other measures considered or implemented by countries to address the taxation of the digital economy, including diverted profits taxes and new withholding or turnover taxes.
The feedback is requested by October 13 so it is received in advance of a public consultation on the taxation of the digital economy.
The OECD has now scheduled this consultation for November 1 at the University of California, Berkeley.
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