PublishedMarch 16, 2018

CCIA welcomes OECD’s report, warns against unilateral EU digital tax

Brussels, BELGIUM — The Organisation for Economic Co-operation and Development (OECD) released its “Interim Report on Tax Challenges Arising from Digitalisation” this afternoon. The report will be discussed at the G20 Meeting of Finance Ministers and Central Bank Governors starting Monday in Buenos Aires.

The OECD report touches on the European Commission’s proposals on digital taxation expected on March 21. The European Commission argues that digital companies are not paying their fair share of taxes. Digital companies are however paying a higher effective corporate tax rate than traditional companies, according to a new think tank study. The Commission is considering the introduction of a new, controversial “Digital Services Tax”. This so-called “interim measure” is targeted to tax specific online platforms’ revenues.

Today’s OECD report concludes that “it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy.”

The OECD report also notes that “There is no consensus on either the merit or need for interim measures and therefore this report does not make a recommendation for their introduction.” It also warns that “a proliferation of different interim measures would be undesirable.”

The following can be attributed to CCIA Europe’s Vice President, Christian Borggreen:
“We welcome today’s OECD report and agree that the so-called ‘digital economy’ should not be singled out.  We encourage the EU to seek international tax reform through the OECD rather than pursuing problematic, unilateral actions aimed at online platforms for political reasons.”

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