Global corporation tax reform efforts ‘on track’ despite coronavirus

5 May 20

Efforts to fix the perceived problems posed by big digital businesses to the global tax system remain on track despite the Covid-19 pandemic, the OECD has said.


The reforms, designed to ensure internet giants such as Facebook and Apple pay more tax in territories where they make money, are still on track to meet their year-end deadline despite some parts of the process being delayed by the crisis, the organisation said.

Director of the OECD Centre for Tax Policy and Administration Pascal Saint-Amans said some groups, particularly those representing business, have pushed for a one-year delay, but he stressed that countries remain committed.

He said there is “an increased need for a consensus-based solution” because of the uncertainty the pandemic has the ability to cause.

A political decision that was due in July has been pushed back to October because of the crisis, leaving just one month before the G20 leaders summit, when the OECD hopes a consensus will be announced.

For Saint-Amans and the OECD, the process has always been about preventing trade wars.

In January, France agreed to shelve its planned digital services tax – a tariff of 3% on revenue made by large digital businesses – until the OECD process has finished.

It did so in the face of threats by the US to impose tariffs on imports of French cheese, wine and designer goods, and the US has made similar threats to other countries considering their own DSTs.

“There is a risk – an increased risk – of a proliferation of digital service taxes, and the risk of trade conflict, especially throughout these turbulences of the economy,” said Saint-Amans.

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