European Commission also welcomes “a new paradigm in tax”

New digital business taxes should not be retroactive, the 500 delegates attending Taxand’s annual conference heard from a senior official from the Organisation for Economic Cooperation & Development (OECD).

In discussing work currently under way at the OECD on potential approaches to taxation in the digital economy during a roundtable discussion on the future of international tax at the conference held in Paris by Taxand, the global tax advisory firm, Grace Perez-Navarro, Deputy Director of the OECD’s Centre for Tax Policy and Administration, stated that “we don’t want to see these rules applied retroactively.”

The comments from (Ms) Perez-Navarro come as the OECD is set to provide an update next month on its work on digital taxation, which is in many ways an extension of its work with the tax authorities of 129 countries in respect of the so-called “base erosion and profit shifting” or BEPS project, relating to the taxation of multinational enterprises.

Central to the debate around digital taxation has been the exploration of which indicators, other than revenue, should serve as a threshold to trigger taxation in a particular country, including the volume of digital content, the maintenance of local language websites and sustained marketing activity. Its final recommendations are scheduled to be presented to the G20 countries at their summit in November 2020, she said.