Technology Industries of Finland’s comments on the OECD’s Pillar One and Pillar Two Blueprints
The OECD published the Public Discussion Drafts Addressing Tax Challenges Arising from Digitalisation on 12 October 2020. Written comments were requested by 14 December 2020. While TIF continues to support the hard work of the OECD to find a global solution, the proposed models are complex and likely to cause significantly more compliance costs and disputes in international taxation. Thus, TIF calls for effective tax dispute prevention and resolution mechanisms for both pillars. The potential impact of the OECD proposals is evaluated to be negative for small open export driven countries, weakening also their attractiveness to international businesses and local companies bearing a material part of the Amount A triggered additional tax. The final model must be fair and sustainable to all countries. In addition, we find that the new Amount A might face substantial problems with data security issues with its revenue sourcing rules prioritizing real-time geolocation user data to be collected, stored and delivered forward.