OECD Urges Countries Not To Go It Alone On Digital Tax

The problems posed by the digitalization of the economy should be addressed collectively and any interim measures taken by countries unilaterally should be “as little damaging as possible,” the OECD’s Director of Taxation has said.

Pascal Saint-Amans told the Irish Independent that to “find a long-term solution, you need to change tax treaties, you need to adopt transfer pricing rules and that’s going to take time.”

“You need to get the right analysis of the challenges of the digitalization of the economy, and things are not stabilizing there. So I think there is an agreement that we need to address this collectively,” he said.

According to Saint-Amans, this process “will take a few years.” He did however acknowledge that, if it takes too long, countries will be faced with the challenge of how to address the concerns of citizens.

Saint-Amans noted that there is some expectation that certain countries will take “interim measures,” but stressed that these measures should be “as little damaging as possible.”

Earlier this month, EU Tax Commissioner Pierre Moscovici said that the situation calls for “a fundamental overhaul of our corporate tax systems.” He argued that while, ideally, progress should be achieved at an international level, but this “is not a prerequisite.”

Moscovici said that although the Commission is working closely with the OECD on the issue, “international progress does not give much cause for optimism.”