OECD Hints At Possible Digital Tax Work Delay
06/05/2020
On May 4, 2020, the OECD held its Tax Talks webcast, to provide stakeholders with a full update on the OECD's work on taxation in the context of COVID-19. It hinted that progress towards a new international tax framework focusing on digital tax issues may be pushed forward.
The webcast, which normally focuses on ongoing international tax reform issues, instead focused heavily on countries' ongoing responses to COVID-19. The OECD reported that over 100 countries have so far announced more than 700 measures in response to COVID-19, including extending tax payment and filing deadlines, allowing taxpayers to defer payment, and suspending debt recovery.
The various measures countries have taken were detailed in a May 2, 2020, update to a spreadsheet being hosted on the OECD's website, which maps out each country's response to COVID-19.
During the webcast, the OECD highlighted that the strict quarantine requirements in countries worldwide have led to new concerns over the tax treatment of cross-border workers, many of whom are stranded in a country that is not their country of residence or unable to physically perform their duties in their country of employment. The OECD said countries should work together to alleviate the unplanned tax implications and potential new burdens arising due to effects of the COVID-19 crisis, based on its earlier guidance on the matter.
The OECD said the challenges of the COVID-19 crisis are magnified for developing countries, which have a greater reliance on tax revenue from large taxpayers than more advanced economies. They will require specific support – notably significant financial support – for helping health and fiscal systems withstand the current shocks, the OECD said.
To support developing states, the OECD/G20 Inclusive Framework on BEPS and Global Forum on Transparency and Exchange of Information for Tax Purposes are strengthening the capacity of their members through a set of online workshops and courses, carried out in partnership with regional organizations, the OECD added.
The webcast also provided an update on the OECD's work on addressing the tax challenges arising from digitalization of the economy. These efforts are continuing, the OECD told stakeholders, with meetings having been conducted remotely with delegates since the COVID-19 outbreak began in March.
The OECD reported that "delegates from the Inclusive Framework on BEPS continue working towards a G20 mandate of reaching a multilateral, consensus-based solution by year-end. They have agreed to postpone the delivery of a political decision from a plenary meeting scheduled for July in Berlin to a new, as-yet undetermined date in October. A virtual plenary meeting of the Inclusive Framework on BEPS is scheduled for July 2020, where delegates will discuss a range of ongoing work, including the fiscal aspects of the COVID-19 crisis."
Source: Pride Partners International