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'Digital tax' not viable: OECD

Thursday, 23 January 2014   (0 Comments)
Posted by: Author: Technology Spectator
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Author: Technology Spectator

A leading tax official at the Paris-based Organisation for Economic Co-operation and Development has indicated proposals for a tax crackdown on digital companies such as Google and Amazon should be scrapped, according to a report in the Financial Times.

According to the newspaper, an international task force has determined that it would not be viable to design separate tax rules for digital companies, due to the increasing digitalisation of the economy.

"The findings are that there is no such thing as digital companies rather than digitalisation of the economy. There may not be therefore a solution for the digital economy but we will need to draw on features of digital economy when we revise the system,” said Pascal Saint-Amans, the leading tax official at the OECD.

"Most of the tax planning by these companies will be addressed by this,” he reportedly said, according to the FT.

Major digital companies have become the focus of much criticism in recent years over aggressive tax avoidance schemes, including the use of a "double Irish” structure that allows companies to lower their corporate tax liability by having royalty payments for intellectual property to be sent to a company that has operations in Ireland but has its headquarters in another country, typically a tax haven.

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