EACA on behalf of its digital tax task force submitted a comment to the OECD’s public consultation on “Addressing the tax challenges of the digitalisation of the economy” on 6 March 2019.
The comment is a response to three proposals released by the OECD, identifying possible solutions for how the current tax base could be changed in order to take into account the fact that companies make revenues in countries in which they do not have a physical presence. The Paris-based organisation is aiming to reach global consensus by 2020, after which the measures could be implemented through domestic law and double tax treaties.
One of the key aspects highlighted by EACA’s task force is the risk of double or even triple taxation. If the issue is not sufficiently addressed, there is a high chance that companies, in addition to the taxes due to their physical establishment in a country, are taxed for certain digital services. They might also suffer from big tech companies passing on the additional tax to them.
The future approach of the OECD will be of particular importance to European businesses and legislators given that the EU’s digital tax proposal has officially been put on ice at the meeting of the EU’s finance ministers (ECOFIN) on 12 March 2019. In the meanwhile, countries such as Austria, France, the UK and Spain are working on their own digital tax initiatives, meaning that agencies would potentially have to comply with multiple and varying digital tax regimes in the future.
Access all the submissions, including EACA’s comment, here.