Ibec, the group that represents Irish business, today outlined its support for the position of the Irish Government, and a number of other member states, in supporting continued multilateral action on Digital Tax at the OECD rather than potentially damaging unilateral action at a European level. The call comes in advance of discussion of a proposal for a unilateral “interim” solution at today’s European Council.
The group expressed concern that the unilateral action on taxation of the digital economy to be discussed today is both poorly timed and ill-judged. The proposed measures risk undermining the progress made by the OECD's Base Erosion and Profit Shifting (BEPS) process towards improving the global corporate tax system and inflaming an already tense economic standoff with the US administration.
Danny McCoy, CEO of Ibec, stated: "Irish business has constructively engaged in the OECD BEPS process which has made the most significant progress in updating the global corporate tax system in the last century. It is clear that more needs to be done to update global rules for an economy which is increasingly digital. Today's proposal, however, risks undermining the multilateral efforts of more than 100 countries to reform the global tax system through the OECD inclusive framework. It is also clearly aimed at a small number of mainly US Corporates and could not have come at a worse time given the current risks to global trade.
"The temporary turnover-based measures proposed today are poorly designed, risk significant unintended consequences and ultimately represent a case of prioritising quick public relations wins over long-term progress in future proofing the global corporate tax system. The proposal, which would undermine the established principle of taxing where value is created and instead move to a tax at a point of sale, will in the long run be negative for EU businesses and economies."