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Previously, the only consensus we had on the taxation of the digital economy was that there was no consensus: the OECD and EU issued substantive papers on the subject, but these highlight the starkly differing views and policy objectives of the participating countries. A number of countries even started the process of introducing unilateral measures, with double (or worse) taxation of impacted revenues a very real possibility.­

However, the OECD now appears to have taken the lead, and is aiming for a long-term consensus by 2020 through an “Inclusive Framework” of participating territories – so hopefully we are approaching a turning point.

The quest for a potential solution will be based on two “pillars”:

  • Pillar 1 – Amend existing international tax rules which allocate taxing rights between countries;
  • Pillar 2 – Resolve the remaining BEPS issues to provide a solution where income is subject to no, or very low, taxation.

The outcome of the Inclusive Framework’s discussions will set the tone of the tax environment going forward; the digitalisation of the global economy has mandated wide-ranging tax reforms that will go far beyond the recommendations in the OECD’s original BEPS Reports, potentially impacting businesses, consumers and even national economies.­ ­

Those businesses that prepare early and remain up-to-speed will be best-placed to respond to these challenging developments. ­

Stay up-to-date with our latest updates in this fast-moving area via KPMG’s cutting-edge global network of specialists. We also introduce ournew technology -- KPMG BEPS 2.0 Model – which equips KPMG professionals with the ability to model the unique circumstances of your organisation, interpret the impact given your global footprint and make tailored recommendations that are specific to you and your objectives.­

Contact us to hear how we can help you.