On 9 October 2019, the OECD Secretariat published a public consultation document setting out a proposal for a unified approach.
Following a meeting on 1 October 2019 of the OECD Task Force on the Digital Economy, the OECD Secretariat published a public consultation document on 9 October 2019 that sets out a proposal for a unified approach to nexus and profit allocation rules. The focus of the consultation is Pillar One of the OECD’s Programme of Work on addressing the tax challenges arising from the digitalisation of the economy, published earlier this year. The proposal under Pillar One grants greater taxing rights to market jurisdictions. This is intended to ensure greater taxation in jurisdictions in which significant business is conducted, even without a physical presence. The Pillar One proposal blends together some of the common elements of the previous proposals we have seen in this space (such as the ‘user participation’, ‘marketing intangibles’, and ‘significant economic presence’ proposals).
The OECD invites comments from the public with a view to discussing the results during a public consultation on 21-22 November 2019. Interested parties are invited to send their comments by email to the OECD no later than 12pm (Paris time) on 12 November 2019. Should you wish to engage with the debate, do not hesitate to let us know.
For more information on these much anticipated developments you may access interviews between Rodney Lawrence (Global Head of International Tax -KPMG in the US) and Matthew Herrington here, as well as a round-up of the key takeaways from the document by Thomas Ickeringill.
For further information please contact:
© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.