The taxation of digital business is proving a tough nut to crack (Ireland)

How can tech giants avoid large tax bills?

By headquartering in a country with a low rate of corporation tax

By concealing their true profits

They can sell their services in foreign jurisdictions without a need for creating permanent establishment

By concealing their revenue

What were the OECD's 'two pillars' for further discussion?

Modifying existing rules to take into account digitisation and a discussion of the final release date

Resolving the remaining BEPS issue and drafting the final proposal

Whether it is possible to legislate for this and if so, how

Modifying existing rules to take into account digitisation and resolving the remaining BEPs issue

What are the 'nexus' rules?

Rules outlining how much tax companies should pay in the countries in which they operate

Rules outlining which countries are considered the same jurisdiction for the purposes of tax

Rules outlining which countries are next in line for changes to their national tax law

Rules outlining how to determine the connection a company has with a given jurisdiction

Why has it become important that the OECD solves this problem soon?

Because big companies are paying and increasingly smaller amount of tax

Because intangible drivers of value are becoming more important and companies can be heavily involved in the economic life of jurisdictions without having a physical presence

Because intangible drivers of value are becoming more important

Because there is likely to be civil unrest about companies paying their fair share

How has the UK decided to deal with this tax issue in the interim?

Lowering its rate of corporation tax to attract technology companies

Rolling out a levy of 2 percent on the profits of tech companies with more than 500GBP million in revenue

Rolling out a digital services levy of 2 percent on profits of tech companies

Developing a digital services tax

Why is the US not keen on these proposals?

Because it has been led by the EU

Because much of the additional tax burden will be borne by companies based in the US

Because the US does not trust the OECD

Because most tech companies are American

Why might the headquartering in Ireland of many large US tech companies prove problematic for the EU in seeking to address this issue?

Because the Irish have a history of vetoing proposed legislation at the EU level

Because Ireland is planning its own legislation

Because any EU tax law will require unanimous approval of EU member states - of which Ireland is one - and the presence of tech companies is valuable for the Irish economy

Because there is confusion about which jurisdictions they should pay tax in

Why are many countries seeking to address this issue unilaterally?

Because the OECD has a history of proposing ineffective legislation

Because many do not believe that the OECD can legislate effectively at this broad a level

Because they want to gain a competitive advantage by enacting light-touch legislation thereby attracting tech companies

Because the OECD is taking too long

What factor makes it likely that Australia will deal with this issue soon?

They have a strong record as a leader in tax policy initiatives

They have a history of dealing harshly with tax evasion and avoidance

They have a low number of tech companies so legislation will be easier to enforce

They have an unusually high number of tech companies in their country

When is the OECD's final report or proposals due?

2020

2022

It is already overdue

2019

The taxation of digital business is proving a tough nut to crack (Ireland)

How can tech giants avoid large tax bills?

What were the OECD's 'two pillars' for further discussion?

What are the 'nexus' rules?

Why has it become important that the OECD solves this problem soon?

How has the UK decided to deal with this tax issue in the interim?

Why is the US not keen on these proposals?

Why might the headquartering in Ireland of many large US tech companies prove problematic for the EU in seeking to address this issue?

Why are many countries seeking to address this issue unilaterally?

What factor makes it likely that Australia will deal with this issue soon?

When is the OECD's final report or proposals due?

You scored

0

out of

0

Test passed. Enter your details to download your certificate. Your certificate will also be sent to you by email.

Our sites

Useful links

Using this site

Contact us

Planned system updates