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Taxation of the Digital Economy: go for the International path first, says ACCA


22 Sep 2017


Euro & Finance

Reacting to the publication of the European Commission Communication on “A Fair and Efficient Tax System in the European Union for the Digital Single Market”, ACCA (The Association of Chartered Certified Accountants) recommends that any new measure should be embedded in the general international corporate tax framework to ensure consistency and coherence of tax rules worldwide.

ACCA  agrees  with the European Commission‘s analysis that the current tax rules no longer fit our modern digital world,  where businesses heavily rely on intangible assets, data and automation, increasingly trading online across borders, with no physical presence. We also agree that this digitalised world is somewhat blurring the traditional underlying principle for corporation tax  - that profits should be taxed where the value is created.

As a global accountancy body, ACCA is also strongly committed to keep consistency on tax matters globally. We therefore strongly support the work of the OECD, which at the request of the G20 have spent the last four years looking at base erosion and profit shifting (BEPS), in order to look at the modern internet economy and the new ways in which trade is now conducted.

Chas Roy-Chowdhury, head of taxation at ACCA said: “The taxation of the digital economy is covered by  BEPS action one on the digital economy. We do not believe that there should be an additional “top up” tax or “Google tax” levy, it is important to retain the normal tax rules for all companies. The BEPS outcomes should help move the Permanent Establishment rules to allow internet trades to be adequately taxed. In addition, the OECD will present in April 2018 to the G20 its interim report on the taxation of the digital economy. And it is precisely expected to entail proposals of reform of international tax rules on permanent establishment, transfer pricing and profit attribution applicable to digital technologies.”

The BEPS final outcome was published and accepted by many countries over and above those which are OECD members. These measures will be fully implemented over the coming years, we thus need to be careful not to create uncertainty and make the EU a poor location to do business”, Chas Roy-Chowdhury warns.

Chas Roy-Chowdhury further explains: “Would international action fail, then we would urge caution against EU-only measures on Permanent Establishment, that could run the risk of creating double taxation. A possible solution could go along the lines of the  UK’s  diverted profits tax system but with less onerous administrative requirements, which looks at the economic reality of the business”.

Another would be to examine challenges under the prism of the Common Consolidated Corporate Tax Base proposal. But the design of option would need to be carefully thought through to avoid compatibility issues such as double-taxation, State aid rules, fundamental freedoms, as well as international commitments under the free trade agreements and WTO rules. ACCA looks forward to the outcome of the discussions on that matter currently being held in the Council and in the European Parliament”, Chas Roy-Chowdhury concludes.



Notes to editors

About ACCA

Contact: Cecile Bonino, Head of EU Affairs,  tel: +32 (0) 2 286 11 37 or

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 188,000 members and 480,000 students in 181 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 95 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: