The international community of OECD/G20 countries and the "Inclusive Framework" is working on solutions to tax the digitalising economy. Concrete results are expected in the beginning of 2020.
A possible tax revolution by the OECD will affect all companies. Therefore the tax challenges of digitalisation can only be solved by a globally coordinated approach between the states. The aim must be to bring a fair taxation of corporate profits in line with the interests of companies and countries.
At the second international Tax Conference of BDI (Bundesverband der Deutschen Industrie e.V) and Business at OECD, "first-hand" information from the OECD was delivered. The event provided impetus for a necessary discussion on taxation of the digitalisation of the economy.
The conference attracted huge interest, with 370 registered participants at the event. Professor Christoph Spengel, Chair of Business Administration and Taxation, University of Mannheim gave an introductory presentation on “Taxing the Digital Economy – An Academic Perspective”. He questioned whether a completely new method of allocating tax revenues to market jurisdictions by using a formulary apportionment method was warranted.
Prof Spengel was followed by Mr Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration (CTPA), OECD speaking on “The Revision of profit allocation and nexus rules (Pillar 1)”. He said that the recent US proposal of making rules voluntary for businesses would not be acceptable and it is like asking for death to be voluntary.
Martin Kreienbaum, Director General of International Taxation at Germany’s Federal Ministry of Finance / Chair of the Committee on Fiscal Affairs (CFA), OECD, then delivered his views on “Global anti-base erosion proposal (Pillar 2)”. He said that anti-avoidance rules, like interest limitations rules and rules for Controlled Foreign Companies (CFC) could be abolished if a minimum tax was introduced. It would also allow Germany to compromise on rules under Pillar 1.
Mr Krister Andersson was keynote speaker for the first panel on “The challenge to the profit allocation and nexus rules”. Mr Andersson referred to and showed the EESC Report on Corporate Taxation.
Mr Andersson was also the moderator for panel 3 on “Strengthening dispute avoidance and dispute resolution mechanisms”. Achim Pross, Head of International Cooperation and Tax Administration Division, OECD, gave the keynote presentation. On the panel were persons acting as Head of Tax for Daimler and Procter & Gamble as well as Head of Transfer Taxing Disputes for EY in Germany. The need for much more forceful rules to resolve international double taxation was called for and will be part of the package now being negotiated.
The conference and presentations, including that of Mr Andersson, attracted a lot of attention with the media.