On 12 November 2019, the CA ANZ Tax Team and CPA Australia lodged a joint submission to the OECD Secretariat on its proposed “Unified Approach” under Pillar One.
The OECD Secretariat proposal sought to encourage agreement among OECD countries as to how to redesign international tax rules to better account for digital business models. Pillar One issues included:
- Reallocation of taxing rights to keep with the modern business environment
- How to tax where businesses no longer need to have a physical presence within a jurisdiction
- How to define scope and apply a formulaic approach
- How to manage for business transformation.
CA ANZ and CPA Australia support the Secretariat’s objective of achieving pragmatic solutions that are sensible from an economic and policy perspective and provide taxpayers with certainty.
Our submission recommended that staged public consultations take place to ensure details are appropriately clarified and common agreement reached among jurisdictions. Also highlighted are some areas of concern and potential challenges of implementing the proposal.