ICC Document & publication

ICC Comments on OECD request for input on work regarding the tax challenges of the digitalised economy

ICC welcomes the OECD initiative to explore the tax challenges raised by digitalisation in preparation for the interim report to the G20 in April 2018 setting out possible solutions to taxing the digital economy at international level.

The digital economy is not only revolutionising the way businesses operate but also creates new opportunities for global growth and prosperity. If nurtured appropriately, technological advances and digital connectivity can spur innovation in business models, business networking and knowledge transfer while also facilitating access to international markets.

As digitalisation continues to be an important driver for global economic growth, ICC strongly believes that any discussions around the taxation of the digital economy should promote, and not hinder, growth and cross-border trade and investment. Furthermore, a collaborative approach together with business would be highly recommended, in order to fully grasp the challenges, implications, opportunities and solutions that the digital economy presents. For the ICC business community, the integrity of the international tax system is of critical importance – coherent and coordinated implementation of international guidelines are essential in establishing a consistent global tax system that better facilitates cross-border trade and economic growth.

ICC supports the OECD Base Erosion and Profit Shifting (BEPS) Action 1 Report conclusions that “Because the digital economy is increasingly becoming the economy itself, it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy for tax purposes. The digital economy and its business models present however some key features which are potentially relevant from a tax perspective.

The Action 1 Report Addressing Tax Challenges in the Digital Economy was developed by the OECD Task Force on the Digital Economy (TFDE) and was published in the context of the BEPS package and approved by Leaders of the G20 in 2015.The TFDE is scheduled to provide an interim report to the G20 in April 2018, setting out possible solutions to taxing the digital economy at international level.

To this end, a public consultation process is underway to explore the tax challenges raised by digitalisation and the potential options to address these, the results of which will be instrumental in developing the report.

ICC welcomes this initiative and fully supports a harmonised approach to ensure that international tax rules remain relevant and applicable in an increasingly digitalised global economy. To this end that ICC submits its comments to the OECD for consideration.