CFE Response to the OECD Consultation on Taxation of the Digital Economy

CFE has published an Opinion Statement that sets out CFE’s response to the OECD public consultation of 13 February 2019, outlining proposals on review of the international tax rules arising from the tax challenges of the digitalising economy.

CFE strongly supports the aim of a future-proof, longer-term reform of the international tax system to address the tax challenges of the digitalisation of the economy. CFE understands the competing aims and objectives of different countries within the Inclusive Framework, but in absence of a common approach, we are increasingly facing an uncoordinated international tax landscape of unilateral actions being taken by individual countries. Such actions inevitably lead to less alignment of tax bases globally, resulting in double taxation and significant compliance burden for businesses, consequently stifling economic growth and innovation.

Given the pace of transformation of the global economy, proposed changes need to be ambitious and sustainable in the long-term, able to follow the pace of emergence of new business models. CFE encourages redoubling of efforts to achieve an early consensus among the Members of the Inclusive Framework on the way forward regarding the revision of the profit allocation rules. Indeed, efforts to address the whole international tax framework, rather than the specific challenges related to the digital economy, would make it potentially more challenging to address the fundamental underlying issues. CFE expresses reservations concerning the proposed global minimum tax rate (income inclusion rule and global anti base erosion proposals).

We invite you to read the Opinion Statement and remain available to discuss any questions or comments.