The Resource A primer on the OECD's "unified approach" for taxing digital and non-digital companies

A primer on the OECD's "unified approach" for taxing digital and non-digital companies

Label
A primer on the OECD's "unified approach" for taxing digital and non-digital companies
Title
A primer on the OECD's "unified approach" for taxing digital and non-digital companies
Creator
Subject
Language
eng
Summary
Work currently underway at the OECD seeks to dramatically change the existing international tax framework, which has supported international commerce for more than a century, to address perceived challenges associated with the "digitalization of the economy". Guided by a "Programme of Work" published by the OECD in May 2019, discussions are proceeding under two "pillars". The goal of the Pillar 1 workstream is to develop new rules that would supersede results under the arm's length principle and allocate greater taxing rights to market countries, i.e., the countries where a business' consumers and users reside. The Pillar 2 workstream seeks to develop rules, similar in some regards to the U.S. GILTI and BEAT regimes, that would effectively establish a global minimum tax regime. The United States has strongly supported the work under both pillars, making it highly likely that countries will reach a consensus agreement by the G20-established deadline of the end of 2020. On October 9, the OECD Secretariat published a "Unified Approach" that, while not a consensus document, outlines a proposal that the Secretariat believes can form the basis for consensus under Pillar 1. The use of the word "unified" reflects that the Programme of Work had previously laid out three alternative approaches - a residual profit split approach, a "distribution-based approach", and a fractional apportionment approach - for development under Pillar 1. The Unified Approach ostensibly incorporates elements of all three approaches and would change existing rules regarding when a business is considered to have a taxable nexus in a market jurisdiction, as well as rules for attributing taxable income to such a taxable nexus
Citation source
In: International tax journal. - Riverwoods. - Vol. 45 (2019), no. 6 (November-December) ; 5 p
http://library.link/vocab/creatorName
Jenn, B.H
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • Unified Approach (OECD)
  • Pillar 1 (OECD)
  • Pillar 2 (OECD)
  • digital economy
  • nexus
Label
A primer on the OECD's "unified approach" for taxing digital and non-digital companies
Instantiates
Publication
Label
A primer on the OECD's "unified approach" for taxing digital and non-digital companies
Publication

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