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ACCA agrees with the EC‘s analysis that the current tax rules no longer fit our modern digital world, where businesses heavily rely on intangible assets, data and automation, increasingly trading online across borders, with no physical presence. ACCA also agrees that this digitalised world is somewhat blurring the traditional underlying principle for corporation tax - that profits should be taxed where the value is created.
As a global accountancy body, ACCA is also strongly committed to keep consistency on tax matters globally. ACCA therefore strongly supports the work of the OECD, which at the request of the G20 have spent the last four years looking at base erosion and profit shifting (BEPS), in order to look at the modern internet economy and the new ways in which trade is now conducted.
Chas Roy-Chowdhury, head of taxation at ACCA said: 'The taxation of the digital economy is covered by BEPS action one on the digital economy. We do not believe that there should be an additional top up tax or 'Google tax levy, it is important to retain the normal tax rules for all companies. The BEPS outcomes should help move the Permanent Establishment rules to allow internet trades to be adequately taxed. In addition, the OECD will present in April 2018 to the G20 its interim report on the taxation of the digital economy. And it is precisely expected to entail proposals of reform of international tax rules on permanent establishment, transfer pricing and profit attribution applicable to digital technologies.
'The BEPS final outcome was published and accepted by many countries over and above those which are OECD members. These measures will be fully implemented over the coming years, we thus need to be careful not to create uncertainty and make the EU a poor location to do business,' Chas Roy-Chowdhury warns.