OECD Confirms Digital Tax Consensus is Completed This Year

Friday, 19 June 2020

OECD Confirms Digital Tax Consensus is Completed This Year

JAKARTA. The Organization for Economic Co-operation and Development (OECD) emphasized that a global consensus on taxation practices on the digital economy must be achieved in 2020.T herefore, it is committed to continue to hold the inclusive framework meeting on schedule, in October 2020.

According to the Secretary General of the OECD, Jose Angel Gurria, this affirmation was conveyed because the OECD was concerned about the unilateral steps of a number of countries implementing tax policies on the digital economy. This measure  has the potential to raise tax disputes and increase the tension of trade between countries, as is currently happened between the United States and European Union (EU) countries.

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As reported by Reuters, the European Union plans to collect taxes on digital companies such as Google, Amazon, and Facebook unilaterally. The move was taken after the United States withdrew from ongoing negotiations between the two parties. 

Indonesia is one of the countries that issued a taxation policy on the digital economy. This measure then received a response from the United States who threatened to investigate the policy.

The OECD assessed that taxation policies on the digital economy must be resolved multilaterally based on consensus by 137 member countries including inclusive framewok. So far the inclusive framework has formulated topics to be discussed at the meeting, including the policy on taxation rights and the allocation of more equitable income and the application of an instrument to prevent the erosion of the tax base (global anti-base erosion proposal).

Several approaches to determining taxation rights that are being reviewed are based on the contribution and number of users (user participation);  intangibles marketing;  and a significant economic presence.This study is expected to produce solutions based on a global agreement at the end of 2020 to address the challenges of digital economic taxation.


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