Digital companies in the European Union (EU) pay less than half the amount of tax that other companies pay, the European Commission said in a report. The EU needs a modern tax framework to seize digital opportunities, while also ensuring fair taxation, the report added.
Within the EU, international businesses typically pay a 10.1% tax rate while traditional companies pay 23.3%, due largely to the difficulty of taxing digital assets, which are typically Internet-based. This is particularly important given that more than half of the world’s top 20 companies are technology-based. The Commission stated that the best solution to address this distortion would be on a global level, but in the absence of sufficient progress, the EU should move ahead alone. (more…)
The Organization for Economic Co-operation and Development (OECD) released the key document that forms the basis of the peer review of the base erosion and profit shifting (BEPS) minimum standard on preventing inappropriate treaty shopping.
International value-added tax guidelines from the OECD were endorsed by 104 countries. The move is a step toward ensuring that consumption taxes are paid in the jurisdictions where products are consumed, particularly when the sales are online. This article looks at the details of the guidelines.
G-20 finance ministers approved the final BEPS measures. The package includes new minimum standards on country-by-country reporting, treaty shopping and tax practices. The heads of state of the international forum are expected to vote on the package at their next summit in Turkey. This article offers details of the final measures.
A group of multinational enterprises (MNEs) in the United States and abroad has asked the U.S. Treasury to “significantly change” certain transfer pricing guidance arising from the Organisation for Economic Co-operation and Development’s (OECD’s) base erosion and profit shifting (BEPS) project.
The OECD (Organization for Economic Co-operation and Development) has released this week the first seven deliverables under its previously announced BEPS Action Plan. BEPS is short for Base Erosion and Profit Shifting, a term otherwise known by the general public as abusive tax avoidance by multinational corporations. These proposed rule changes are aimed at ensuring corporate profits are taxed where the economic activity generating the activity is performed and where value is created. They intend to severely limit the ability for corporations to artificially shift profits from high tax jurisdictions to low or no tax jurisdictions.