While progress has been made toward potential changes to international tax principles to reflect the digitization of the economy, more work is needed, according to correspondence between Treasury Secretary Stephen Mnuchin and the secretary-general of the Organization for Economic Cooperation and Development.
In his letter, Mnuchin expressed general support for the overall objectives of the OECD initiative. However, he raised strong concerns about unilateral measures, like digital services taxes, that have been adapted by various countries (most notably France). He also expressed concern about certain aspects of the proposals and pledged to work with the OECD to address those concerns.
Over the last two months, as part of a longer term project, the OECD has published two consultation documents that describe approaches to address perceived deficiencies in how multi-national taxpayers are taxed. ABA, through its membership in the International Banking Federation, has participated in meetings and the filing of a variety of comment letters, including the most recent with respect to the Phase 1 and Phase 2 consultations. ABA continues to monitor these developments.
