Supranational organisations (OECD), the European Union and European governments are trying to address the tax challenges of the digitalisation. However, it is proving extremely difficult to find a common, multilateral solution, due to the divergent interests of the countries involved. Indeed interests change depending on whether a country is home to a digital market or home to a company’s headquarters.

Against this backdrop, the OECD issued a public consultation document in February that seeks input on two main questions: (a) whether value is created by R&D activities or by users and (b) whether new rules/approaches should address only highly digitalised business (e.g., online marketplaces) or also the effects of digitalisation on traditional business (e.g., e-commerce).

BonelliErede has recently provided its comments on the OECD public consultation document addressing the tax challenges of the digitalisation of the economy.  In particular, BonelliErede affirmed that the arm’s length principle must remain the cornerstone in calculating taxable income in intra-group transactions also for digitalised business. BonelliErede also affirmed that the OECD approach should not be limited to highly digitalised business, but should also address the complexities of digitalisation in general. Finally, BonelliErede affirmed that the same approach should apply to both physical and non-physical presence.

Marco Adda and Francesco Saverio Scandone will partecipate to the public consultation meeting to be held at the OECD Conference Centre in Paris on 13 and 14 March.

Find here BonelliErede comments on the OECD public consultation document addressing the tax challenges of the digitalisation of the economy.