The US Treasury Secretary has called for a suspension of talks on pillar one of the OECD’s two-pillar approach to international tax reform. This is a major blow to the prospects for reaching a multilateral solution by the end of 2020, although it remains to be seen whether the US is simply driving a hard bargain on the elective safe harbour approach and can be brought back to the negotiating table if concessions are made. With talks on pillar one on a knife-edge, the stakes on digital taxation are continuing to rise with more countries looking to implement unilateral solutions and the Office of the US Trade Representative announcing the opening of an investigation into the digital service taxes introduced by ten countries, including the UK.
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The US Treasury Secretary has called for a suspension of talks on pillar one of the OECD’s two-pillar approach to international tax reform. This is a major blow to the prospects for reaching a multilateral solution by the end of 2020, although it remains to be seen whether the US is simply driving a hard bargain on the elective safe harbour approach and can be brought back to the negotiating table if concessions are made. With talks on pillar one on a knife-edge, the stakes on digital taxation are continuing to rise with more countries looking to implement unilateral solutions and the Office of the US Trade Representative announcing the opening of an investigation into the digital service taxes introduced by ten countries, including the UK.
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