OECD Leads Multinational Coalition to Address Digital Economy Tax Laws
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International Tax experts view digital tax as one of the “hotbutton” issues of the new decade. The exponential international growth of the digital economy has erased retail and wholesale borders, had carved new roots and frameworks into the supply chain, and not surprisingly, has upended the way the traditional ways and means of tax collection. How do countries collect taxes from buyers across continents? Is there a uniform, unilateral method to comply with each country’s tax code, or is it possible to create international tax rules for the collection of sales and use taxes on digital platforms? To that end, the Organisation for Economic Co-operation and Development (OECD) has gathered over 134 countries and jurisdictions to tackle this important issue. The OECD is an international policy-building body whose goal is to establish international norms and find evidence-based solutions to a range of social, economic and environmental challenges. “We’re making real progress to address the tax challenges arising from digitalisation of the economy, and to continue advancing toward a consensus-based solution to overhaul the rules-based international tax system by 2020,” said OECD Secretary-General Angel Gurría. “This plan brings together common elements of existing competing proposals, involving over 130 countries, with input from governments, business, civil society, academia and the general public. It brings us closer to our ultimate goal: ensuring all MNEs pay their fair share.” ”Failure to reach agreement by 2020 would greatly increase the risk that countries will act unilaterally, with negative consequences on an already fragile global economy. We must not allow that to happen,” says Gurría. IWTA will keep clients apprised of the progress and success of implementation of a unilateral agreement on a digital tax code. Clients with businesses that sell online to customers outside of their own countries will face new cross border tax issues. Even solopreneurs can be affected if they sell goods or services online to international clientele. Click here to read the full press release from OECD.