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Oecd – Recent Developments – An Update

Mayur Nayak Tarunkumar G. Singhal
Anil D. Doshi
In this issue, we have covered major developments in the field of Taxation and work being done at OECD in various other related fields. We shall endeavor to update the readers on major developments at OECD at regular intervals. Various news items included here are sourced from various OECD Newsletters as available on its website.

1. Request For Input Regarding Work On Tax Challenges Of The Digital Economy - 22nd November, 2013

1.1 Background

1. At the request of G20 Finance Ministers, in July 2013 the Action Plan on Base Erosion and Profit Shifting was launched. The G20 leaders at their meeting in St. Petersburg on 5-6 September 2013 fully endorsed the Action Plan and welcomed the establishment of the OECD/G20 BEPS project in which all non-OECD G20 countries participate on an equal footing with OECD Countries.

2. The Action Plan sets forth 15 actions to tackle BEPS in a comprehensive and coordinated way. The development of the 15 actions in the Action Plan will result in significant changes to the rules for the taxation of cross-border profits. The aim is to ensure that profits are taxed where the economic activities that generate them are carried and where value is created. The digital economy provides a good illustration of the types of challenges facingthe international tax system.

3. According to the Action Plan:

The spread of the digital economy also poses challenges for international taxation. The digital economy is characterised by an unparalleled reliance on intangible assets, the massive use of data (notably personal data), the widespread adoption of multi-sided business models capturing value from externalities generated by free products, and the difficulty of determining the jurisdiction in which value creation occurs. This raises fundamental questions as to how enterprises in the digital economy ...

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