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I have come to the key conclusion that one cannot ring fence the digital tax beat.
Yesterday was proof of that.
Yesterday was proof of that.
If you're a subscriber, you'll see that today's edition of @TaxNotes Today International is jam-packed to all kinds of digital taxation goodness. But let me walk you through what will from now on be known as "Digital Tax Day" (h/t @danieldbunn
On this side of the Atlantic, at the crack of dawn, I covered the first part of @OECDtax's pillar 1 public consultation. While everyone could agree on the need for simplifying pillar 1, there were different opinions on how to get there. Me for @TaxNotes https://www.taxnotes.com/tax-notes-today-international/base-erosion-and-profit-shifting-beps/oecd-navigates-calls-simplifying-global-tax-reform-plan/2021/01/15/2l63x
. @ryanmfinley covered the second part of the consultation, focusing on the importance of tax certainty if/when countries agree to implement pillar 1. Here's his great @TaxNotes story https://www.taxnotes.com/tax-notes-today-international/digital-economy/delivering-tax-certainty-critical-pillar-1s-success/2021/01/15/2l649
While I'm writing, @USTradeRep drops three more decisions about the digital taxes of Austria, Spain and the UK, plus an update on its other investigations.
I start panicking.
@akathanasiou saves the day with an excellent @TaxNotes story: https://www.taxnotes.com/tax-notes-today-international/digital-economy/us-slams-digital-taxes-austria-spain-and-uk-unfair/2021/01/15/2l64f
I start panicking.
@akathanasiou saves the day with an excellent @TaxNotes story: https://www.taxnotes.com/tax-notes-today-international/digital-economy/us-slams-digital-taxes-austria-spain-and-uk-unfair/2021/01/15/2l64f
I keep writing. I see some new tweets pop up. @EU_Taxud has kicked off a public consultation on its plans for a digital levy.
I break out into a cold sweat.
@PaezWrites jumps in to action and kills it for @TaxNotes. https://www.taxnotes.com/tax-notes-today-international/digital-economy/eu-assessing-impact-digital-tax-would-have-smes-consumers/2021/01/15/2jy4n
I break out into a cold sweat.
@PaezWrites jumps in to action and kills it for @TaxNotes. https://www.taxnotes.com/tax-notes-today-international/digital-economy/eu-assessing-impact-digital-tax-would-have-smes-consumers/2021/01/15/2jy4n
What's this I hear about Spain delaying its DST?
Never fear, William Hoke is already on the case. Here he is with the @TaxNotes goods: https://www.taxnotes.com/tax-notes-today-international/electronic-commerce-taxation/spain-delays-due-dates-dst-financial-transaction-tax/2021/01/15/2l63n
Never fear, William Hoke is already on the case. Here he is with the @TaxNotes goods: https://www.taxnotes.com/tax-notes-today-international/electronic-commerce-taxation/spain-delays-due-dates-dst-financial-transaction-tax/2021/01/15/2l63n
Uh oh, Bruno Le Maire is talking DSTs, tariffs, and Biden again? There's no way I can get to it...oh wait, Annagabriella Colon is all over it for @TaxNotes https://www.taxnotes.com/tax-notes-today-international/trade/france-push-biden-aircraft-dispute-trade-war-eu/2021/01/15/2gv8m
The real kicker comes when @KiarraStrocko, who covered a DC Bar panel I was supposed to cover, asks me about something odd that Chip Harter said. Harter, as you recall, was the lead negotiator at the OECD inclusive framework before retiring in November.
If you'll remember, 137 countries have been trying to reach consensus on pillars 1 and 2 before the end of 2020. A key roadblock? The US's proposal to implement pillar 1 on a "safe harbor" basis, which didn't fly with the other countries.
Talks among the countries in the inclusive framework on BEPS ground to a halt, as the US said it couldn't make any political decisions because conditions could change after the election, especially in Congress. And--surprise!--it did.
The inclusive framework is waiting for Biden to put a new Treasury team in place to resume discussions on pillar 1, so a deal can get over the finish line by mid-2021 (effectively end of June, I understand). Everyone's in a holding pattern. Will the US play ball?
It all boils down to the issue of scope--which companies are in or out? Pillar 1 proposes that new rules should apply to companies providing automated digital services, as well as consumer facing businesses, but there's a lot of disagreement about what/who counts
Lots of stakeholders during yesterday's consultation tried to propose ways to get around the scope issue, by tying scope to objective metrics, like group operating profit thresholds, instead of subjective metrics, which are more controversial.
But what about this safe harbor issue? Will the Biden administration stick to that policy?
Well, Chip Harter blew the lid off that yesterday, saying that the unpopular safe harbor idea was "not a basis for an agreement" and that Biden should try something else. But what?
Well, Chip Harter blew the lid off that yesterday, saying that the unpopular safe harbor idea was "not a basis for an agreement" and that Biden should try something else. But what?
. @KiarraStrocko picked up on Harter's comment =s that Biden should effectively abandon the safe-harbor idea and adopt a proposal that Germany floated in mid-2020.
She asked me what I knew about it.
I had no clue.
She asked me what I knew about it.
I had no clue.
We looked into it and found out that there was an informal compromise proposal floating around in the IF last year that tied the scope of pillar 1 amount A to quantitative factors instead of activity type.
The type of option that stakeholders called for during the consultation.
The type of option that stakeholders called for during the consultation.
Here's our @TaxNotes story, for those who want to find out more. It remains to be seen whether this option is still viable, or whether the new Biden team would even consider it. Hell, maybe I'm overstating how important this sounds. https://www.taxnotes.com/tax-notes-today-international/digital-economy/us-must-rethink-stance-global-tax-reform-deal-harter-says/2021/01/15/2l63q
But one thing's for certain--yesterday was one of those crazy stressful days that reminded me how lucky I am to be a journalist--and to have such amazing and talented @TaxNotes colleagues. FIN
