In recent years, the unilateral implementation of Digital Services Taxes (DSTs) and similar measures – along with the rise in transfer pricing disputes – has introduced substantial uncertainty for business and created double taxation risks. The commitment of October 2021, under which over 130 members of the OECD/G20 Inclusive Framework pledged not to introduce DSTs or comparable measures until the end of 2023, brought temporary stability to the international tax framework. The significance of a stable and predictable tax system that effectively addresses these unilateral measures cannot be overstated.
For the past two years, ICC has constructively engaged in the OECD public consultation process on the Two-Pillar solution, which presents a valuable opportunity to restore stability within the global tax framework in a more long-term fashion.
Whilst awaiting the forthcoming update on Pillar One in July, as ICC we sent a letter to the Director of the OECD Centre for Tax Policy and Administration reiterating the important need for a solution that is agreed multilaterally and widely implemented by Inclusive Framework jurisdictions. While also highlighting points of concern previously raised in public consultation responses, in this letter we underscored how a multilaterally and widely implemented solution is indeed the only way to ensure the accomplishment of the fundamental objective of greater stability in international taxation.