This Opinion Statement by the CFE Fiscal Committee is in response to the OECD request for input on work regarding the tax challenges of the digitalised economy published on 22 September 2017. The response was submitted on Friday 13 October 2017.
The Opinion Statement sets out general remarks on the tax challenges of digitalisation and also answers specific questions raised by the OECD in relation to challenges and opportunities presented by digitalisation.
The Opinion Statement highlights that any new taxes should not stifle the growth of the digital economy or discourage innovation. Further, any new measures should be restricted by threshold to only very large highly digitalised companies. The adverse impact of any new measures on SMEs and consumers was also highlighted.
In addition the Opinion statement analysed the effects on tax certainty, the creation of potential double taxation and the need for effective dispute resolution techniques.
The Opinion Statement discusses the three options proposed to address the broader tax policy challenges:
- A tax nexus concept of “significant economic presence”;
- A withholding tax on certain types of digital transactions; and
- A digital equalisation levy.