Member states of the organisation are ready with a proposal for the next meeting of the G20.
Background: Taxation of digital services has been high on the agenda of policymakers for the past year. The European Commission issued a proposal in March 2018; around the same time, the OECD issued a report showing how countries still needed to reach consensus on digital taxation. In the months that followed, EU countries proved how difficult it is to reach an agreement, on which they are still working to date.
What’s new? On 29 January, the OECD announced it is ready to issue a first proposal to G20 finance ministers, with the view to agree on international rules in 2020. The idea is to revisit the ‘nexus’ rules, i.e. how to determine the connection of a business with a given jurisdiction and how much profit should be allocated to the business conducted there. The framework will also consider concepts such as ‘marketing intangibles’, ‘user contribution’ and ‘significant economic presence’, and how they can be used to modernise the system.
Next steps: Before the proposal lands on the table of G20 ministers in June 2019, there will be a public consultation. The OECD will issue a document, and hold a public meeting in Paris on 13–14 March 2019.
