The COVID-19 pandemic has adversely impacted many business activities, but it has not slowed down the developments of international tax. The OECD continues its efforts to revamp the international tax system in the post-BEPS era and to pursue a consensus on the proposed taxation of the digital economy (Pillar I and Pillar II) within the Inclusive Framework. However, the challenges in achieving a consensus, and the adoption of a system acceptable to the majority of the Inclusive Framework, have never been so formidable. In the meantime, the United Nations has proposed a withholding tax on digital services in tax treaties and some countries are continuing the imposition of their digital service tax. In addition, the European Union is considering a Plan B in case no consensus can be achieved. The year 2021 is going to be another year full of tax developments.
As the leading international tax research organization and knowledge centre, IBFD has closely followed these developments and actively participated in the discussions. During this online tax conference, our experts will provide an update and share their views on some of the issues under discussion.
Status quo of taxation of the digital economy
The debate over taxation of the digital economy, and in particular the technical issues of the proposals for Pillar I and Pillar II, remains the focus of the international tax landscape at the beginning of 2021. There are many technical issues and conflicting economic interests that make it a considerable challenge to reach a consensus within the Inclusive Framework. The OECD is expected to produce a progress report after the consultation meeting on 14-15 January 2021. The conference will address these developments and share the views of experts.
Tax treaty developments in China in the post-BEPS era
Since 2015, when the Final Reports on the BEPS Action Plan were published, China has concluded new tax treaties with Argentina, Italy, New Zealand and Spain, and with several developing countries such as Angola, Cambodia, Gabon, Kenya and Zimbabwe. As a member of the Inclusive Framework, China committed itself to incorporating the tax-treaty-related BEPS measures into the new tax treaties and also signed, with some opt-outs, the Multilateral Instrument for the swift implementation of these measures with regard to the existing tax treaties. The conference will provide an analysis of the features of the newly signed treaties that actually reflect the current tax treaty policy of China.
The impact of COVID-19 on transfer pricing policy
The COVID-19 pandemic has inevitably had repercussions for the transfer pricing policy of the business community. Supply chains may have been disrupted and business functions, risks and assets may have had to be temporarily relocated and special issues regarding the treatment of losses may also have arisen. At the end of 2020, the OECD published "Guidance on the transfer pricing implications of the COVID-19". IBFD has invited a TP expert from the advisory industry to update the audience on transfer pricing issues in the context of COVID-19.