140 character exchanges are unlikely to be the most revealing and nuanced on a topic as complex as the OECD’s ‘base erosion and profit shifting‘ project. But it was interesting that the OECD decided to reach out in this way, and also that questions did not just come from the usual suspects – the Institute of Chartered Accountants in England and Wales, for example.
Here’s a storify of the questions and answers. While, as I say, you can’t read too much into a single tweet, a couple were worth mentioning.
This is interesting, and it clarifies the references to the balance between source and residence in the BEPS report itself. The UK is a source country with respect to Google and Amazon.It’s hard to see how the e-commerce issues can be resolved without expanding the definition of ‘permanent establishment‘ beyond its current requirement for a physical presence. This is after all a concept designed to restrict source taxation. If you expand it, you shift the balance towards taxation at source.
Again, interesting. These are on the reform agenda for China and India, as set out in their chapters of the UN practical manual on transfer pricing. So based on this very blunt and non-specific discussion, we can conclude that, if the OECD is going to throw these countries a bone, it doesn’t look like it will do so through the BEPS project.
Here’s a slightly longer and more thorough, if also rather polemical, analysis.