On 18 June 2020, the OECD Secretary-General issued a statement regarding recent statements and exchanges in relation to the ongoing negotiations to address the tax challenges of the digitalisation of the economy. Most notably in this respect is that the United States seem to have sent a letter to certain European countries (France, Italy, Spain and the UK) warning them that the discussions regarding the OECD’s Taxing the Digital Economy initiative has reached an “impasse” and that the US will put retaliating measures in place when these countries press ahead with the local implementation of Digital Service Taxes (DSTs).
This message follows after the United States announced that they opened trade investigations into proposed and enacted DSTs of nine countries and the EU.
The OECD Secretary-General now recommends in his statement that all members of the Inclusive Framework on BEPS remain engaged in negotiations, with the goal of reaching a multilateral solution by the end of 2020. According to the Secretary-General, failure to reach a multilateral solution would lead to the implementation of unilateral measures by countries that could trigger tax disputes, increase trade tensions, and further damage the global economy. The next inclusive framework meeting where a consensus-based solution is expected to be discussed is planned for October 2020.
If you would like to hear more on this topic, please register for our webinar on Tuesday 30 June during which Deloitte`s Swiss and US tax experts will discuss the developments at OECD level in more detail, focusing on the practical aspects of managing the potential impact of Pillar One.
If you would like to discuss more on this topic, please reach out to our key contacts below.