The existing international tax rules may no longer capture where value is created, and many countries are implementing a unilateral digital services tax rather than waiting for international consensus. The Unified Approach on Pillar One is currently the international solution at the table. However, further development is needed and the OECD is ambitiously aiming for the end of 2020. The current COVID-19 situation encourages people to be online more, which further increases the importance of Pillar One.
In 2015 BEPS Action 1 identified that it is difficult to ringfence the digital economy. In 2017 the Inclusive Framework, mandated by the G20 finance ministers, delivered an interim report on the tax challenges arising from digitalisation. This report shows new business models such as the value network (Facebook) and the value shop (Intel) which have a strong reliance on intangible assets, scale without mass and data and user participation. Through several OECD public consultation documents, the Pillar One proposal is now being further developed. This proposal includes both the arm’s length principle and formulary approaches, and increases taxation in market jurisdictions. In our webinar we will get you up to speed on the issues that need to be resolved.
The following topics will be covered:
- Brief overview of the unilateral digital service taxes
- Scope of Pillar One
- New nexus in the user/market jurisdiction
- New profit allocation rule and the interaction with the arm’s length principle
- Dispute resolution mechanisms
To register, please click here.
Webinar: Remaining BEPS issues: Pillar Two on 2 July 2020
A second webinar following the Pillar One webinar (Remaining BEPS issues: Pillar Two) will be organized on 2 July 2020. For more information and to register, please click here.