Despite the growing coronavirus pandemic, the OECD secretariat is still working “full steam” ahead on a solution to update the international tax rules for the 21st century — while using digital methods.
“Multilateral efforts to address the tax challenges arising from digitalization of the economy continue,” the OECD confirmed in a March 17 statement, adding that meetings with delegates involved in that work are taking place remotely.
All physical on-site meetings at the OECD’s Paris headquarters have been suspended and OECD staff are telecommuting, in line with the safety measures France recently announced in response to the COVID-19 emergency.
Meetings of the steering group of the inclusive framework on base erosion and profit shifting, the task force on the digital economy, and the working parties carrying out the technical aspects of the project to design a solution will take place virtually “in the coming weeks, on schedule,” the statement says.
“The working methods will be adapted to allow all countries to fully participate,” the OECD added. “All participants continue working towards reaching a political decision on the key components of a multilateral consensus-based solution at the G-20/OECD inclusive framework on BEPS plenary meeting," which is set to take place in Berlin July 1-2.
Nearly 140 countries belonging to the inclusive framework are working on designing and reaching consensus on a multilateral approach on a global corporate tax overhaul by the end of 2020. The countries hope the solution will allow them to tax multinational companies that raise revenues in their jurisdictions with little to no physical presence under current tax rules and to address remaining issues not covered by the original BEPS project.
That solution’s design involves two pillars, with pillar 1 calling for a “unified approach” to revising profit allocation and nexus rules, and pillar 2 consisting of a global anti-base-erosion proposal that would introduce global minimum taxation. In February, G-20 finance ministers approved a new road map for the technical work for the solution.
“Quite interesting to work digitally on a so-called digital project,” Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration, recently told Tax Notes via email.
Jason Oxman, president and CEO of the Information Technology Industry Council, welcomed the OECD’s continued work. “As the world grapples with COVID-19, the tech industry shares the global priority of responding to and helping to mitigate the spread of the virus,” he said.
“At the same time, we continue to work on the ongoing issues facing the global tech and business community and support the OECD’s commitment to addressing the tax challenges arising from the digitalization of the economy this year,” Oxman added.