WASHINGTON – Today, ITI issued a reaction from Jennifer McCloskey, Vice President of Policy, following the Organisation for Economic Co-operation and Development’s (OECD) release of a Public Consultation document on the Secretariat Proposal for a Unified Approach to the Nexus and Profit Allocation Challenges Arising from Digitalisation (Pillar 1):
“This public consultation is an essential step in the effort to address the tax challenges raised by the digitization of global business. This latest effort narrows the scope from multiple approaches to a single framework for allocating the right to tax profits between countries and allows stakeholders the chance to provide feedback as the OECD works toward a final plan. We are grateful for the opportunity to comment and assist in filling in essential details. We urge all stakeholders to continue to commit to this important multilateral process and work together to ensure any reforms to international tax policies are done in a fair and thoughtful manner.”
The Pillar 1 public consultation addresses the allocation of taxing rights between countries based on a company’s presence and the type of activities being performed in a country, as well as its level of profits in the market jurisdiction. It represents the latest action in the ongoing OECD process to address the tax challenges of the digitalization of the economy, which is set to conclude in 2020. ITI has been an engaged member in the OECD conversations on the issue of international digital taxation, among other issues.