PwC comments on OECD digital tax blueprints

Oct 12, 2020

Commenting on the OECD 'Blueprints' on tax digitalisation/globalisation published on Monday 12 October, Carol Stubbings, PwC Global Tax and Legal Services Leader, said: 

“It’s welcome that so many countries, especially during the pandemic, remain committed to seeking a multilateral solution to these important issues. 

“However, with the detailed blueprints, it is clear the differences between many countries will require further time, and compromise, to reach resolution. Much of the complexity in both pillars needs to be addressed, otherwise these proposals could unduly burden countries and taxpayers alike. This could make consistent and coherent implementation impossible, which will frustrate the ultimate goal of achieving a truly multilateral solution. 

“For business leaders and policy makers, the post pandemic taxation mix needs to serve multiple purposes in financing public services, stimulating employment and economic recovery at the same time. That will not be achieved by a tax free-for-all, so business leaders will hope that, pending a multilateral solution, countries will show restraint in any unilateral or uncoordinated long term decisions."

Charlotte Richardson, UK tax partner at PwC, added:

“This new framework has the potential to be a once in a lifetime change to the corporate tax system. If agreed, it would potentially remove the highly distortive, gross base taxes such as the recently introduced UK Digital Services Tax (DST) and address the prospect of double taxation. In doing so, this could overcome a significant stumbling block in any UK-US trade negotiations.

"Nonetheless, there is still a long way to go and the complexity and implementation challenges shouldn’t be underestimated. This is particularly important for UK businesses which not only have to adjust to a post-pandemic world but also to a post-Brexit environment.”

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Richard Pain

Richard Pain

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