December 14, 2020

WASHINGTON – Today, global tech trade association ITI submitted comments in response to the Organisation for Economic Co-operation and Development/G20 Inclusive Framework’s (OECD/IF) Public Consultation Document on the Reports on the Pillar One and Pillar Two Blueprints (Blueprints). In the comments, ITI applauded the OECD and members of the Inclusive Framework on the significant technical work that went into the Blueprints and reiterated its position that the overarching outcome must be a stable, multilateral, and consensus-based solution in order to meaningfully address the tax challenges arising from the digitalization of the economy.

“Our global membership – which features industry leaders headquartered in the United States, Germany, India, Japan, Korea, and more – views the negotiations taking place under the auspices of the Inclusive Framework as the best forum for addressing the tax challenges arising from the digitalization of the global economy. The proliferation of unilateral measures has already contributed to the fragmentation of the global tax system, and an inability to reach consensus will result in further fragmentation of our global tax system,” ITI wrote in its comments.

ITI’s comments provided extensive technical feedback to the Blueprints and emphasized several additional high-level principles intended to guide negotiators’ efforts, including:

  • A successful agreement must respect the increasing digitalization of the global economy, and avoid arbitrary distinctions based on the digitalization of business models that are not grounded in data or tax policy principles;
  • The agreement must result in a coherent system that avoids a menu of options for governments to choose from;
  • At the time of political agreement, governments must agree to withdraw unilateral measures and refrain from introducing new measures;
  • The agreement should be based on long-standing and well-founded underlying principles of international taxation, and must not attempt to ringfence the digital economy;
  • Strong, predictable, and timely dispute prevention and resolution mechanisms must be included under both Pillars; and
  • The U.S. Global Intangible Low-Taxed Income (GILTI) provision should be deemed as a compliant minimum tax for purposes of Pillar Two.

ITI looks forward to continuing to engage with the OECD and members of the Inclusive Framework as they work to resolve questions related to addressing the tax challenges of the digitalizing global economy.

Read ITI’s full comment submission here.

Public Policy Tags: Tax Policy