Ibec's continued OECD engagement on BEPS

 

 

 

Ibec, as evidenced through its interaction on the OECD BEPS initiatives over recent years, is actively supportive of international tax initiatives which seek to align profit with substance worldwide. In March, as the sole representative of Irish business, Ibec attended a global consultation of business, governments, and NGOs at the OECD in Paris on the tax challenges of the digitalisation of the economy. This forms part of the ongoing BEPS process and constitutes a much broader discussion than a previous focus on just US digital firms at a European level.

 

In ongoing discussions about the digital economy, it is important to ensure that tax policy facilitates and supports continued future growth. In this respect, Ibec continues to support the 11 principles for taxation of the digital economy set out by Business at OECD in January 2019. We also set out a number of key points with regards to the consultation:

 

• Change must be underpinned by a broad-based global agreement.
• We cannot isolate ‘digital’ from ‘the economy’.
• Solutions must be administrable, fair and avoid double-taxation.
• Consistency, clarity, and proportionality are needed on nexus and profit allocation.
• Marketing intangibles must have a credible basis and cannot be a ‘catch-all’.
• Further BEPS rules must have a clear evidence base and respect existing taxing rights.

 

The next steps in this process will be ongoing discussions at the OECD in the lead up to a proposal being brought before the G20 in June. If progress can be made significant change in global tax rules may be agreed before the end of 2020. Ibec will continue to represent Irish business interests both at Business at the OECD and the broader OECD forum.

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