OECD floats sending tech tax proceeds to countries where revenues are generated

OECD floats sending tech tax proceeds to countries where revenues are generated

OECD Secretary-General Angel Gurría said: "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 worldwide tax system by 2020".

Some OECD countries have been pushing for the tech giants to pay tax in all countries where they have users.

The proposal - Secretariat Proposal for a Unified Approach - would re-allocate some profits and corresponding taxing rights to countries and jurisdictions where MNEs have their markets.

The Organization for Economic Cooperation and Development, which sets global tax standards, on Wednesday outlined a huge overhaul of tax rules that would hit tech giants including Google, Facebook, and Amazon with much bigger tax bills. Big-tech companies have become the world's most profitable and well-capitalized businesses while also coming under increasing public scrutiny.

Governments will gain more power to tax major multinational companies - including Silicon Valley behemoths - for conducting business in their countries under a proposed overhaul of cross-border tax rules released by the Organisation for Economic Cooperation and Development. The Independent Commission for the Reform of International Corporate Taxation (ICRICT) said Wednesday that multinational corporations push as much as 40 per cent of foreign-derived profits into tax havens.

France has vowed it will scrap its digital tax once a new worldwide levy is in place.

More news: Unannounced Apple Watch Sleep app referenced by the Alarms app
More news: Trump Administration Blocks Ambassador's Testimony, A Key Witness in Ukraine Scandal
More news: Motorola One Macro Launched with Triple Rear Cameras, Helio P70

Finance ministers are set to discuss the OECD proposals during a meeting in Washington next week.

The tensions bubbled over in July when the US responded to a French digital tax by launching a so-called 301 investigation that could result in tariffs. France in particular has been vocal on the subject, proposing a digital services tax which would levy a 3% tax on French sales for a select group of 30 companies including Facebook, Google, and Amazon.

The NDP have said they would make sure that big tech companies "play by the same rules as Canadian broadcasters", in part by ensuring they pay taxes.

The U.S. says France's move unfairly targets American companies, but the French government says it will stick with the tax unless there is a global solution at the OECD. But he doesn't expect details to be resolved soon because of the forthcoming consultations and 2020 deadline. It merges competing proposals that had divided countries, with some wanting to single out digital companies and others aiming at a broader target.

In an e-mail Wednesday, Facebook Canada spokesperson Erin Taylor said that "We continue to support multilateral approaches like that being undertaken at the OECD".

Aaron Brindle of Google Canada said that the company agreed that tax rules should be "simpler and clearer". Simon Jefferies of the Conservatives said the party's forthcoming platform would have more details about taxing multinational tech companies. The OECD plans to present a more detailed outline agreement in January 2020.

Related Articles