February 11, 2021

BRUSSELS – Today, global tech trade association ITI asked the European Commission to forgo its consideration of an EU-level digital levy and instead redouble its efforts to ensure that EU Member States and other governments participating in the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework negotiations have the support they need to advance a multilateral, consensus-based solution that addresses the tax challenges of the digitalising economy.

In comments to the European Commission, ITI noted that the Commission’s decision to launch public consultations on an EU-level digital levy contradicts the EU’s commitment for ongoing multilateral negotiations and risks undermining the significant progress participating governments and the OECD have made during the past several years.

“Global tax policy challenges require global tax policy solutions, which is why nearly 140 governments and more than a dozen observer organisations have committed to the negotiations taking place under the auspices of the Inclusive Framework,” ITI wrote in its submission. “We have welcomed the EU’s commitment to a multilateral, consensus-based solution to the tax challenges arising from the digitalisation of the global economy and encourage the European Commission to continue to promote multilateral engagement as the sole means of addressing the underlying tax policy challenges identified by participating governments.”

The proliferation of unilateral measures has already contributed to the fragmentation of the global tax system, and an inability to reach consensus on a multilateral solution will only exacerbate that fragmentation and other negative consequences, such as the slowing of economic growth and the augmentation of diplomatic and trade tensions.

ITI and its members have consistently supported the negotiations at the OECD/G20 Inclusive Framework, including through the development of Principles for a Solution in the OECD’s Project for Addressing the Tax Challenges of the Digitalisation of the Economy in May 2020 and regular technical engagement in December 2020, December 2019 (Pillar Two), and November 2019 (Pillar One).

Read ITI’s comments here.

Public Policy Tags: Tax Policy