Remarks by Angel Gurría,
11 April 2019 - Washington, United States
(As prepared for delivery)
Dear Ministers and Governors,
With the strong support of both the G7 and the G20, the OECD’s work on international tax has made great strides in the areas of tax transparency, the implementation of the BEPS measures to tackle corporate tax avoidance and in supporting capacity building in developing countries.
The key issue that we are currently addressing is the tax challenges arising from the digitalisation of the economy. The status quo is not an option and the danger we are working against is a fragmentation of the international tax framework, with individual countries going their own way, which would be damaging to all. G7 countries have taken a true leadership role here and I am pleased to say there is good progress.
The 129 members of the Inclusive Framework agreed in January to explore options under two pillars. G7 countries have proposed several of these options. The first pillar looks at how the key features of digitalisation should affect the allocation of taxing rights among countries. Such features include “scale without mass”, the reliance on intellectual property, and the role of user contributions. The second pillar serves as a backstop to the first, giving jurisdictions a right to ensure a minimum level of tax where income is subject to no or only very low taxation.
Reaching agreement will require a truly collaborative effort. We have just had a very productive public consultation, with almost 400 participants, which will inform and enrich the debate. The Inclusive Framework is now further developing the options to deliver in June a work plan leading to a long-term, consensus-based solution. We recognize the importance of assessing the economic impact of the various proposals and we will present very preliminary work on this to the Inclusive Framework in May but, given that many design features of the proposals have not yet been decided, this will require ongoing work and should not delay the crucial work of moving towards consensus.
I look forward to delivering an update on this work, including the work plan, to G20 Finance Ministers in Fukuoka, on 8-9 June. I am optimistic that if we are able to continue this work in a good spirit of cooperation and compromise, we will succeed in meeting the 2020 deadline for a global consensus-based solution. We count on the G7’s continued support and leading role in charting the way forward.