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Latest digital tax byte

The latest addition to our series of brief insights into the workings of the UK and supranational bodies reviewing the taxation of digitalisation of business. This edition includes the Finance Bill Report Stage debate on the UK digital services tax (DST).

DST following the Report Stage of the Finance Bill

The UK Finance Bill provisions on the digital services tax (DST) and proposed new clauses and amendments affecting them were discussed at the Report Stage in the House of Commons yesterday, Wednesday 1 July. There were no changes agreed to the draft legislation in this area but some lively debate particularly about changes that didn’t make it into the Bill.

Digital tax megabyte for June 2020

A collection of the brief insights throughout June 2020 of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition includes the Finance Bill Committee's debates on the UK digital services tax (DST), an update on Kenya's DST/ significant economic presence (SEP) measure and an announcement that the US is beginning investigations into whether the UK's DST and various others are unfair or discriminatory toward US commerce.

Digital Services Tax - Navigating the winds of change

Businesses are increasingly having to consider their potential liability to UK digital service tax (DST) and developments in other territories' DSTs, all in the context of the wider OECD-led project seeking an Inclusive Framework consensus. Read our latest flyer below that highlights these challenges. To discuss any aspect of the digital taxation changes, DST or OECD options, and to see how we can support you, please contact any of the people listed on the flyer or your usual PwC advisor.

Fundamental changes in international tax for all large businesses

The G20/OECD Inclusive Framework of nearly 140 countries is committed to delivering change in 2020. Increasingly, countries are taking unilateral action to introduce new taxes where users/consumers are located. These taxes increase the urgency for agreement of fundamental changes to the entire international corporate tax system; allocating profit to markets and ensuring minimum levels of tax are paid.

Digital tax megabyte for May 2020

A collection of the brief insights throughout [Month yr] of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition includes summaries of the presentations on digitalisation from the OECD in its latest Tax Talks webcast of 4 May 2020 and provides some recent updates on the UK and other digital services taxes (DSTs) around the world (Czech Republic and Kenya).

Digital tax megabyte for April 2020

A collection of the brief insights throughout April 2020 of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition includes the release of further guidance from HMRC concerning compliance with the UK DST regime, as it came into force from 1 April 2020.

French tax authorities release Digital Services Tax guidelines

French tax authorities recently released tax guidelines for the digital services tax (DST) enacted in July 2019. The 3% DST applies to companies that provide certain digital services localized in France with global annual revenue exceeding EUR 750M of taxable services and exceeding EUR 25M in France. The tax is based on the amount, excluding VAT, that the taxpayer collects as consideration for taxable services provided in France since January 1, 2019. The Guidelines are open for public consultation and comments until May 23, 2020.

UK publishes legislation and guidance on digital services tax

The Finance Bill published in March 2020, included revised draft legislation for a digital services tax (DST) to begin from 1 April 2020. A series of explanatory notes and guidance materials have also been published up to and including 1 April. Two notable differences from the draft legislation published in July 2019 are a revised scope for the definition of a marketplace and the reference in each case to services rather than platforms.

Digital tax megabyte for March 2020

A collection of the brief insights throughout March 2020 of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition includes the release of the UK Budget, confirming the intention to go ahead with a Digital Services Tax (DST) and the subsequent publication of the Finance Bill and revised guidance, plus an OECD press release confirming the July target date on the digitalisation/ globalisation project (which, given the near impossibility of physical travel following Covid-19 measures, means that innovative ways for businesses to feed into the process will be paramount).

International tax update for multinationals operating in the UK - period to 6 March 2020

Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This issue includes: 1) Budget 2020 predictions; 2) a video where our experts discuss the implications now HMRC has commenced various actions to effect recovery of the alleged state aid in the FCPE case; 3) a podcast on the key areas of the OECD’s final paper on the transfer pricing aspects of financial transactions.

Digital tax megabyte for February 2020

A collection of the brief insights throughout February 2020 of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition includes the release by the OECD on 31 January 2020 of materials agreed by the Inclusive Framework (IF), comments made in a Tax Talks webcast later the same day and a further webcast on 13 February on the impacts assessments of various of the proposals. The African Tax Administration Forum (ATAF) has also issued a subsequent Technical Note on the latest IF position. There is too comment on Significant Economic Presence (SEP) rules in two countries: the Indian draft budget for 2020-21 deferring application to April 2022 and changing withholding taxes on e-commerce activities; and Nigeria's enactment and gazetting of new measures.

Digital tax megabyte for January 2020

A collection of the brief insights throughout [Month yr] of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition includes comment on the US Trade Representative hearings and comments on French digital services tax (DST) having closed, France and US appearing to have reached a standstill on collection of DST and tariffs as well as Canada becoming more reticent on a DST while Latvia & Norway have been assessing revenue potential

No slowdown in unilateral tax measures targeting digital activities in 2020

2020 started with new digital services taxes (DSTs) coming into effect in Italy and Austria, with more on the horizon in the coming months, including agreed legislative provisions from Turkey beginning in March. The pace of countries considering DSTs continues to accelerate, even as discussions by the OECD Inclusive Framework move forward, driven in part to mitigate the rationale for DST implementation.

Italy adopts digital services tax and reintroduces notional interest deduction

Italy recently adopted Law n. 160 of 2019, implementing its Budget Law for 2020. The adoption follows the approval of the Law on December 27, 2019, and the Law’s publication in the Official Gazette on December 30, 2019. The Law contains several corporate tax provisions, including a digital services tax and reintroduction of a notional interest deduction for capital injection.

International tax update for multinationals operating in the UK - period to 10 January 2020

Happy New Year and welcome to the first update on recent developments in international and treasury tax of interest to multinationals operating in the UK for 2020. This issue includes the Government's announcement of the next Budget; our publication that provides a high-level overview of the implementation of the EU Anti-Tax Avoidance Directive (ATAD) in 28 Member States; the latest edition of our global newsletter International Tax News that includes items on Colombia's tax bill that would mitigate the repeal of previous tax reform efforts and Italy’s draft 2020 budget.

Digital tax megabyte for December 2019

A collection of the brief insights throughout December 2019 of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition covers the published responses to the OECD consultation on Pillar 2 (minimum tax) and the US Trade Representative's office initial response to French DST and request for comments ahead of a public hearing starting 7 January 2020.

'Tax and Digital flyer' summarising the OECD project

The G20/OECD Inclusive Framework of more than 130 countries has been reviewing the rules of the international corporate income tax system. The project which started out as 'tax and digital' has now broadened into a more thorough review of the system. Here we summarise in an easy to read two-page document, the areas in which the legislation may change, the time line, myth busters, the impact for businesses and how PwC can help.

Digital tax megabyte for November 2019

A collection of the brief insights throughout November 2019 of the type provided on an ad hoc basis in our Latest digital tax byte update. The edition includes the OECD Secretariat seeking input on global minimum tax design under Pillar 2 on digitalisation, the possible expiration of the WTO's customs duty moratorium on e-commerce and our response to the Pillar 1 'Unified Approach' consultation (along with access to the other 300+).

Digital tax megabyte for October 2019

A collection of the brief insights throughout October 2019 of the type provided on an ad hoc basis in our Latest digital tax byte update. This includes a summary of the OECD's Secretariat Proposal for a “Unified Approach” under Pillar One of the Work Programme on digitalisation of the economy that, if ultimately agreed, would fundamentally alter the international tax regime

Italy draft 2020 budget calls for unilateral digital services tax

The 2020 Italian draft budget (Draft Budget) introduces a 3% unilateral ‘Digital Services Tax’ (DST). The DST will apply beginning January 1, 2020. The Italian government expects the DST to generate roughly 708 million EUR in tax revenue per year. Although it does not contain any specific references, the Italian DST is structured similarly to the recently introduced French DST and the European Commission’s proposal (2018/0073 (CNS) - Proposal for a Council Directive on the common system of a digital services tax on revenues resulting from the provision of certain digital services).

International tax update for multinationals operating in the UK - period to 14 November 2019

Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This issue includes the OECD's latest public consultation on the digitalisation of the economy, seeking views on the introduction of common global minimum tax rules, also known as Pillar Two; and the latest edition of our DAC6 Pulse newsletter, enabling you to see how EU MDR is being implemented across the EU.

OECD Secretariat seeks input on global minimum tax design

The Organisation for Economic Co-operation and Development Secretariat on 8 November, published Public consultation document: Global Anti-Base Erosion Proposal (‘GloBE’) (Pillar Two) which seeks stakeholders’ views on the introduction of common global minimum tax rules across the more than 130 countries participating in the OECD Inclusive Framework.

International tax update for multinationals operating in the UK - period to 26 September 2019

Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This issue includes our analysis of the recent judgments in the Starbucks and Fiat State aid cases, plus details of the Dutch budget, including the measures in response to the Danish beneficial ownership cases.

International tax update for multinationals operating in the UK - period to 14 August 2019

Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. In this issue our specialists discuss: 1) HMRC's Profit Diversion Compliance Facility, 2) legislative proposals in Luxembourg and the Netherlands to implement EU MDR, and 3) draft legislation being introduced in Luxembourg regarding ATAD2.

International tax update for multinationals operating in the UK - period to 18 July 2019

Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. Among the items featured is the draft legislation for inclusion in Finance Bill 2019-20 that's been published for consultation and includes material relating to the Digital Services Tax (DST), the deferral of corporation tax payments on EU group asset transfers and rules for spreading transitional adjustments on new lease accounting.

Finance Bill 2019-20: International tax & treasury measures amongst the draft legislation published 11 July 2019

The Government has published draft legislation for consultation, in preparation for the publication of the Finance Bill following Budget 2019 (expected in November). The intention is that the Finance Bill will receive Royal Assent prior to 1 April 2020, with some of the measures therefore expected to take effect on that date. This consultation period will close on 5 September. This insight shares items of particular interest from an international tax and treasury perspective.

OECD work programme for reaching consensus on tax challenges from digitalisation sets ambitious targets according to stakeholders

The OECD released on 31 May 2019 the Programme of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalisation of the Economy, agreed by the OECD/G20 Inclusive Framework (IF). The aims are broadly to have a political agreement on a unified approach by the end of 2019 and to be prepared to implement that solution by the end of 2020. Stakeholders at the US Council for International Business (USCIB) 2019 OECD International Tax Conference on 3-4 June had a first opportunity to react, amid presentations from OECD and members of the IF involved in agreeing the programme. Read more in this PwC Tax Policy bulletin.

Digital tax megabyte for March 2019

A collection of the brief insights throughout March 2019 of the type provided on an ad hoc basis in our Latest digital tax byte update. This includes Netherlands support for a minimum tax proposal, EU Finance Ministers failure to agree on a compromise DST proposal and an update on the French DST proposal.

Digital tax megabyte for February 2019

A collection of the brief insights throughout February 2019 of the type provided on an ad hoc basis in our Latest digital tax byte update. This includes a summary of the OECD consultation to reshape the international tax system for the digitalised age - the Pillar 1 and Pillar 2 discussions.

Digital tax megabyte for December 2018

A collection of the brief insights throughout December 2018 of the type provided on an ad hoc basis in our Latest digital tax byte update. This includes indications of a French Digital Services Tax from 1 January 2019, the EP seeking to finalise its reports on digital taxes and a France-Germany proposal to reduce the scope of an EU-wide DST.

Keeping the PEace - The (re)Emergence of Unilateral PE Measures in wake of Multilateral Efforts

Unilateral advances on digital taxes and digital PE concepts will challenge international tax harmony and cause serious challenges - are we ready? The past year has seen our tax world manage to slowly gain ground in post-BEPS territory, but also it’s been a year in which we have witnessed the rise of revolutionary concepts attempting to lead ‘old’ taxation frameworks into the digital era.

Digital Services Tax - agree to disagree?

A tax issue which is relevant on a worldwide scale ideally needs a worldwide solution; however, at present, as with other areas outside of tax, the worldwide stage seem more divided than ever on future plans for a digital services tax. We look at the current state of play for the overall OECD agreement and some of the key players (UK, EU and US) feeding into the discussions and what businesses should be doing to engage with these changes and prepare themselves.

OECD and EC release disparate recommendations on tax and the digitalisation of the economy

The OECD Inclusive Framework on BEPS (‘IF’, a group of 113 countries) issued its paper Tax Challenges Arising from Digitalisation – Interim Report 2018 (the ‘Report’) on 16 March, and held a public webcast to discuss its findings. This was followed by the European Commission's (EC’s) recommendations for EU-wide adoption on similar topics, which were published on 21 March. A number of countries around the world, including within the EU, have also proposed or adopted unilateral measures in recent months.

Spain proposes a digital services tax

The Spanish Minister of Finance recently announced that the government will propose to Parliament a new digital services tax (DST) that would align with the draft EU Directive presented by the European Commission (EC) on 21 March 2018. The government’s aim is for the new tax to be in force before the end of 2018.