Pandemic Complicates OECD Digital Tax Overhaul

Last week, the Organization for Economic Cooperation and Development, or OECD, announced that the deadline for 140 countries to reach an agreement on key policy features of its digital economy tax rewrite would be moved from early July to mid-October.

The organization maintained its goal of providing an implementation plan before the end of the year; however, it recognized the coming agreement and implementation plan will not address all open issues. Instead, some elements may be determined after 2020 under a staged approach.

As the COVID-19 pandemic intensifies and the global economy declines, a change in the timeline is not surprising. However, the delay not only reflects policymakers' hesitance to divert resources from the health crisis to the OECD's digital tax proposals, it also highlights unique challenges that countries have not previously contemplated.

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