United Nations Committee of Experts on International Cooperation in Tax Matters (UNTC)

SCTI Submission, June 2020

Comments on Session Paper relating to tax consequences of the digitalized economy – issues of relevance for developing countries

The SCTI offers its comments on the Session Paper on “Tax consequences of the digitalized economy – issues of relevance for developing countries” (E/C.18/2020/CRP.25) to be discussed at the 20th Session of the UN Committee of Experts on International Cooperation on Tax Matters. The comments examine key issues for developing countries in the Unified Approach (UA) to Pillar One and explore alternative solutions at the international level as discussed in the Paper.

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Research Paper 111, May 2020

National Measures on Taxing the Digital Economy

By Veronica Grondona, Abdul Muheet Chowdhary, Daniel Uribe

The Organisation for Economic Co-operation and Development (OECD)’s Inclusive Framework is considering a two-pillar approach on taxing the digital economy. Preliminary estimates about the impact of its recommendations show a modest increase in corporate income tax collection, the benefits of which are expected to go mostly to the developed countries. At the same time, there is a rise in national measures on taxing the digital economy, a move spurred by the onset of the COVID-19 pandemic. This is also fully within the rights of countries under international law, despite labels of ‘unilateralism’. This research paper highlights the direct tax measures being taken by various countries and finds three key approaches to tax the digital economy: (1) digital service taxes; (2) nexus rules based on significant economic presence ;(3) withholding tax on digital transactions.

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Tax Cooperation Policy Brief 11, February 2020

The Role of South-South Cooperation in Combatting Illicit Financial Flows

By Manuel F Montes

Developing countries bear the brunt of costs from illicit financial flows (IFFs). These losses are the result of the facilities that the global system provides transnational companies, operating in multiple tax jurisdictions, to move their profits to favorable locations. International cooperation has been seen to be a key ingredient in restricting IFFs. However, a difference in interests in the treatment of many types of transactions between developed and developing countries is an obstacle to a fast solution of the problem. Developing countries must seek to seize the initiative to restrict their losses from IFFs. They can deploy various joint and concerted actions, within the umbrella of the principles of South-South cooperation for this purpose.

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Book by the South Centre, 2019

International Tax Cooperation: Perspectives from the Global South

About the Book:

A substantive reform of the global tax system involving a variety of multilateral platforms is underway.  The question is not whether the tax standards and practices will change, but in which direction.

Developing countries have long sought changes in rules, standards and procedures shaping the allocation of taxing rights among sovereign states. In the wake of the 2008-2010 Great Recession, developed country governments engaged in massive public sector layoffs and channeling enormous public resources to bail out large financial companies and their wealthy investors.  The Panama Papers, the Paradise Papers, the Lux Leaks became household words in the United States and Europe because of the journalistic coverage.  Other scandals, such as the “cum/ex” fraud in Germany involving a loophole in the taxing of dividend receipts were less known but just as materially significant.  Tax reform, particularly as it applied to the treatment of corporations working in multiple tax jurisdictions, thus became not only a problem of developing countries but an issue of global concern.

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SC, ICTD and BEPS Monitoring Group, joint expert-level peer exchange

Title:         Peer Exchange Discussion during XIX Session of the United Nations Committee of Experts on International Cooperation in Tax Matters

Date: 15 October, 2019

Venue: Geneva, Switzerland

Organizers: South Centre, International Centre for Tax and Development (ICTD) and BEPS Monitoring Group

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