The Asia Internet Coalition (AIC) has submitted comments to the Organisation for Economic Co-operation and Development (OECD) on the Public Consultation Document on the Reports on Pillar One and Pillar Two Blueprints.
We understand that the top priority of the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) has been to develop a solution to the tax challenges of the digitalisation of the economy. On 12 October 2020, the Inclusive Framework released a package consisting of the Report on the Pillar One Blueprint and the Report on the Pillar Two Blueprint. These Blueprints reflect the convergent views on many of the key policy features, principles and parameters of both Pillars, and identify remaining technical and administrative issues as well as policy issues where divergent views among Inclusive Framework members remain to be bridged.
The AIC strongly supports the consensus-based multilateral process at the Organisation for Economic Co-operation and Development (OECD) to develop new international tax rules that address the tax challenges arising from digitalization. Given the current economic situation globally, we believe that now more than ever, businesses need certainty that international consensus is the most effective approach to ensure a stable and reliable system going forward and provide long-term stability and certainty for multinational businesses to continue investing, operating and driving growth. Any new rules should be premised on net basis taxation, avoid double taxation, provide businesses with tax certainty, and be as simple as possible.
In addition, we believe that digital service taxes (DSTs) and other unilateral measures that discriminate based on industry or nationality, are detrimental to the global economy and do not result in long-term stable tax and trade policy. As such, any international consensus on Pillar One should come with the absolute certainty that such taxes and unilateral measures must be eliminated at the time multilateral consensus is reached, and that countries must commit not to adopt such unilateral measures in the future.
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