Digitalization and Taxation

Thursday, November 5

Mr. Gunter Mayr, Director General Tax Policy and Tax Law, Austrian Federal Ministry of Finance
Ms. Daniela Hohenwarter-Mayr, Professor for Tax Law, Deputy Head of the Institute for Business Law at the University of Vienna
Ms. Sabine Kirchmayr-Schliesselberger, Head of the Institute of Finance Law, University of Vienna
Mr. Thomas Ecker, Deputy Head of the VAT Unit, Austrian Federal Ministry of Finance

The digital transformation of the economy without doubt shapes the future of taxation. While the digitalization spurs innovation, generates efficiencies, and improves services, the breadth and speed of this change introduces challenges as well as opportunities. The webinar focused on the reform proposals currently discussed at OECD and EU level for corporate taxation and VAT, discussed unilateral solutions, and highlighted challenges and open questions on the path to a consensus-based solution.

In his introductory remarks, Gunter Mayr detailed where the discussion at OECD level stands with regard to a political solution concerning the allocation of taxing rights (Pillar 1) and closing the loopholes allowing Base Erosion and Profit Shifting (Pillar 2), highlighting Austrian priorities. Sabine Kirchmayr-Schliesselberger presented unilateral solutions for taxation of digital advertising, which countries adopted as stopgap measures pending a multilateral consensus-based solution, including on EU level. With a view to the low effective average tax rate of digital businesses as opposed to traditional business models, Daniela Hohenwarter-Mayr explained the envisaged system for expanding taxing rights of market/user jurisdictions in its complexity. Thomas Ecker contrasted this by focusing on the advances on EU level since 2013 in the area of indirect taxation, explaining challenges and policy responses for remote services, distant sale of goods, the role of platforms, and the sharing economy. With progress made regarding the goals of securing VAT revenue and preventing distortions of competition, he highlighted further initiatives for fair and simple taxation, for instance the planned extension of the One-Stop Shop.

With a view to the acceleration of the trend towards digitalization by the COVID-19 pandemic, the fiscal impact of the pandemic response, as well as possible political shifts, the panel concluded on an optimistic note, seeing a strong probability for a consensus-based solution.

The webinar was opened by JVI Director Hervé Joly, and moderated by Barbara Dutzler.

Barbara Dutzler, Senior Economist, JVI


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