Taxation
ICC welcomes G20’s endorsement of global tax framework
ICC has welcomed the decision taken by G20 Finance Minister’s to endorse the preliminary agreement by the OECD Inclusive Framework to modernize the global taxation system — but cautions that coordinated implementation of the agreement will be vital to avoid placing unnecessary burdens on cross-border trade and investment.
ICC Secretary General John W.H. Denton AO said: “The fundamental architecture and parameters of the agreement reached through the OECD set a solid foundation to modernize the global taxation system. The G20’s backing for the framework today is an important step towards maintaining the integrity of the international tax system — and avoiding a proliferation of unilateral tax measures that undermine consistency internationally, create risks of double taxation and could rapidly place a significant drag on any post-pandemic recovery.
“What we now need to see from the G20 — is a clear political commitment to implement the OECD framework in a coordinated and consistent manner. Further clarity on co-ordination between application of the new rules and removal of digital services taxes would be a good place to start in this regard.
“Cooperation on the application of the new rules — especially on the reallocation of profits — will be vital to avoid unnecessary disputes and frictions to cross-border trade and investment. Allied with this, there remains a clear need to have a strong process for arbitration and dispute resolution built into the final framework to mitigate the risk of a damaging proliferation of double taxation disputes.”
