Tax and Fiscal Policy Business Roundtable Encourages OECD to Follow Sound Policy Principles in Changes to International Tax Rules

Sep 18, 2019

Washington – Business Roundtable is encouraging the Organization for Economic Co-operation and Development (OECD) to follow sound policy principles as it considers changes to long-standing international tax rules in the course of its “Program of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalization of the Economy.” Leaders of America’s largest companies with over 15 million employees are calling on the OECD to avoid creating unwarranted barriers to cross-border investment that would undermine opportunity and growth for American workers and businesses.

“A reliable and consistent international tax system is essential to the cross-border investment that expands opportunity for workers and creates sustained economic growth,” said Gregory Hayes, Chairman & Chief Executive Officer of United Technologies Corporation and Chair of the Business Roundtable Tax & Fiscal Policy Committee. “Business Roundtable favors the OECD’s multilateral approach to developing and updating these rules and looks forward to working with the OECD and other policymakers toward principles-based solutions.”

Business Roundtable is encouraging the OECD to adhere to the following principles in any proposed solution:

  • No Double Taxation: Companies must have the certainty that any new or revised rules will not result in multiple layers of tax.
  • Effective Dispute Resolution: Countries must commit to mandatory and speedy dispute resolution procedures for cases where two or more countries assert the right to tax the same profit.
  • Minimal Changes to Profit Allocation and Rules on Right to Tax: Any reallocation of profit to market countries should be modest and anchored to clearly stated principles, including the arm’s length standard. Corresponding changes to rules giving a country the right to tax should apply only to the revised profit allocation and should not create non-tax business risks.
  • Treatment of GILTI as a Compliant Minimum Tax: Companies subject to the U.S. Global Intangible Low-Taxed Income minimum tax must be exempt from any tax on base-eroding payments.