07/23/2020

Global Digital Tax Plan Rewrite Taking Shape

The OECD said it will offer some changes for consideration in October

After U.S. officials effectively withdrew from months-long international negotiations on a global digital tax plan, the Organization for Economic Cooperation and Development (OECD) said this week it will offer some changes for consideration in October. The OECD has been trying to reach agreement among nearly 140 countries on a global tax overhaul to address how “consumer-facing” digital giants like Apple, Facebook, Google and Twitter are taxed in countries where they have users.

The OECD’s work has taken on some urgency as some countries have grown impatient and proposed their own digital tax plans while hoping for an international consensus.

“We need to be realistic,” OECD’s top official, Pascal Saint-Amans, told reporters this week.

Should the U.S. not resume talks on a global tax deal, U.S. tech companies could find themselves facing a bevy of unilateral digital taxes from different nations. European countries are reportedly working on a response to Mnuchin’s decision. The Trump administration’s response to different digital tax proposals has been to threaten tariffs on foreign goods and services.

Just this week, Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) released a statement about the U.K.’s digital tax plan.

“Unilaterally imposing a discriminatory tax that unfairly targets U.S. businesses damages efforts to achieve a multilateral solution and unnecessarily complicates the path forward for a U.S.-U.K. trade deal,” Grassley and Wyden said. “The U.K. should reconsider this punitive action against its ally.”

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