Manal Corwin outlines five steps for navigating uncertainty.
By Bob Nihen
On January 19, faced with the threat of retaliatory U.S. tariffs on its exports, France announced it would delay until December 2020 the estimated payment obligations associated with the digital services tax imposed on certain large U.S. digital companies. In exchange, the U.S. agreed to delay the imposition of tariffs to give both countries more time to resolve the conflict. The next day, at the World Economic Forum in Davos, U.S. Treasury Secretary Steven Mnuchin warned that Italy and Britain could face U.S. tariffs if they proceeded with plans for new digital taxes.
These and other recent developments underscore what may be at stake as the Organisation for Economic Co-operation and Development (OECD) tries to forge a comprehensive consensus on global digital tax rules by the end of 2020.
“Top tax executives at multinationals across a range of industries are paying close attention to the debate over taxing the digital economy,” says Manal Corwin, principal in charge of KPMG LLP’s Washington National Tax practice. “They understand that, just as the digitization of the economy is reshaping entire markets and industries, it could also be the catalyst for rethinking longstanding international tax rules and standards.”
Corwin outlines a number of steps companies can take now to prepare for what may come, including:
Many questions remain about whether the OECD can forge a multilateral agreement on digital taxation and what it might look like.
But one thing appears certain, Corwin notes. “Given the extent to which digital technologies have transformed the way so many different companies operate, the global debate over taxing the digital economy will continue and likely affect multinationals across a broad range of industries.”
For more information, or to arrange an interview with Manal Corwin, please contact Bob Nihen