The G20 finance ministers and central bank governors, meeting in Buenos Aires, Argentina, from 21 to 22 July, reaffirmed their determination to reach a multilateral agreement on the taxation of the digital economy. Ministers also agreed that crypto-assets could be used for tax evasion, approved a document containing tax policy recommendations . . . . The pandemic has made it more difficult for the OECD to reach an international agreement on the taxation of the digital economy, because nations have had to urgently focus their attention on public health and immediate economic issues. “Now all we have to do is agree on the consensus and look at the technical possibilities to make it an agreement.” In a report to G20 finance ministers prepared for the meeting, the OECD secretariat warned that if a comprehensive tax agreement is not reached, the likely outcome will be an increase in unilateral tax measures and trade disputes. “While we welcome the G20, which tells us that they hope to reach an agreement by the end of the year,” pascal Saint-Amans, director of the OECD`s Centre for Policy and Tax Management, said in a webcast of the OECD`s tax talks on 22 July, “we must recognize that there are a number of outstanding issues.” The path to a final agreement remains difficult, as there is disagreement over a common definition of a digital enterprise and the distribution of tax administrations between different countries. Meanwhile, some nations have introduced their own unilateral taxes on digital services (DST) and have generally promised to abolish the tax if the OECD, a 37-country organisation, is able to conclude a multinational agreement on the inclusive framework. The EU has also indicated that it could act alone if OECD efforts to reach an agreement on the taxation of the digitised economy fail. In order to provide their tax administrations with instruments to combat corporate tax evasion through transfer pricing, officials from 7 other countries have signed an agreement in which the parameters of the automatic exchange of transnational reports on large ones . .
G20 finance ministers have called for the project to be finalised by October, when they are due to meet, as they hope to reach an agreement on taxation of the digital economy by the end of 2020. However, the deadline could be extended. The heads of state and government of the world`s 20 largest economies have once again pledged to work on a political agreement on revised rules on the taxation of multinationals` incomes. The Heads of State and Government agreed to a revised deadline until mid-2021. The EU has also hinted that it may act. “There is no doubt,” said Ursula von der Leyen, President of the European Commission, last month, “if an [IF] agreement falls short of a fair tax system that allows long-term sustainable incomes, Europe will present a proposal early next year.” Although no comprehensive tax treaty has yet been concluded, Pascal Saint-Amans, director of the OECD`s Centre for Policy and Tax Management, said in a webcast of 12 October that the situation should be seen as a half-full glass. He stressed that the IF had made considerable progress in consensus and that there was a solid basis for a future agreement. In the midst of uncertainty, the Organisation for Economic Co-operation and Development is continuing its work on a proposed international agreement to address the fiscal challenges of the digital economy. The OECD today asked global companies to evaluate the Mutual Agreement Procedure (MAP) for the settlement of tax disputes in Austria, France, Germany and Italy.