Group of 137 countries have reaffirmed their commitment to ensure fairer taxation in digital world
The challenge of taxing corporations that operate internationally in the digital world is to be addressed this year.
A group of 137 countries and jurisdictions known as the Inclusive Framework on BEPS (base erosion and profit shifting) met last week and voted to continue its drive to create an equal footing for international tax rules focusing on two key pillars.
Firstly, the question of where tax should be paid. This includes the belief that multinational enterprises should pay tax in jurisdictions where they do significant and sustained business even if they have no physical presence.
The second pillar addresses certain other issues including international businesses paying a minimum level of tax.
"It is more urgent than ever that countries address the tax challenges arising from digitalisation of the economy, and the only effective way to do that is to continue advancing toward a consensus-based multilateral solution to overhaul the international tax system," said OECD Secretary-General Angel Gurría. "We welcome the Inclusive Framework’s decision to move forward in this arduous undertaking, but we also recognise that there are technical challenges to developing a workable solution as well as critical policy differences that need to be resolved in the coming months."
The Inclusive Framework is part of a wider OECD drive to ensure fair taxation globally and the ongoing work will be presented in a new OECD Secretary-General Tax Report during the next meeting of G20 finance ministers and central bank governors in Riyadh, Saudi Arabia, on February 22-23.
