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Road map for resolving the tax challenges arising from digitalisation of the economy

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The international community has agreed on a road map for resolving the tax challenges arising from the digitalisation of the economy, and committed to continue working toward a consensus-based long-term solution by the end of 2020, the OECD announced today.

The 129 members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) adopted a Programme of Work laying out a process for reaching a new global agreement for taxing multinational enterprises.

The document, which calls for intensifying international discussions around two main pillars, was approved during the May 28-29 plenary meeting of the Inclusive Framework, which brought together 289 delegates from 99 member countries and jurisdictions and 10 observer Organisations. It will be presented by OECD Secretary-General Angel Gurría to G20 Finance Ministers for endorsement during their 8-9 June ministerial meeting in Fukuoka, Japan.

Drawing on analysis from a Policy Note published in January 2019 and informed by a public consultation held in March 2019, the Programme of Work will explore the technical issues to be resolved through the two main pillars. The first pillar will explore potential solutions for determining where tax should be paid and on what basis (“nexus”), as well as what portion of profits could or should be taxed in the jurisdictions where clients or users are located (“profit allocation”).

The second pillar will explore the design of a system to ensure that multinational enterprises – in the digital economy and beyond – pay a minimum level of tax. This pillar would provide countries with a new tool to protect their tax base from profit shifting to low/no-tax jurisdictions, and is intended to address remaining issues identified by the OECD/G20 BEPS initiative.

In 2015 the OECD estimated revenue losses from BEPS of up to USD 240 billion, equivalent to 10% of global corporate tax revenues, and created the Inclusive Forum to co-ordinate international measures to fight BEPS and improve the international tax rules.

“Important progress has been made through the adoption of this new Programme of Work, but there is still a tremendous amount of work to do as we seek to reach, by the end of 2020, a unified long-term solution to the tax challenges posed by digitalisation of the economy,” Mr Gurría said. “Today’s broad agreement on the technical roadmap must be followed by a strong political support toward a solution that maintains, reinforces and improves the international tax system. The health of all our economies depends on it.”

The Inclusive Framework agreed that the technical work must be complemented by an impact assessment of how the proposals will affect government revenue, growth and investment. While countries have organised a series of working groups to address the technical issues, they also recognise that political agreement on a comprehensive and unified solution should be reached as soon as possible, ideally before year-end, to ensure adequate time for completion of the work during 2020.

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Astana hosts 18th Iran-Kazakhstan Joint Economic Committee meeting

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Photo: Iranian Agriculture Minister Javad Sadati-Nejad (R) and Kazakh Prime Minister Alikhan Smailov sign MOU documents in Astana on Thursday.

The 18th meeting of Iran-Kazakhstan Joint Economic Committee meeting was held on Thursday in Kazakhstan’s capital Astana, at the end of which the two sides signed a comprehensive document to expand cooperation in numerous areas including trade, agriculture, environment, tourism, science, and technology, education and sports.

As IRIB reported, the two countries’ Joint Economic Committee meeting was co-chaired by Iranian Agriculture Minister Javad Sadati-Nejad and Prime Minister of Kazakhstan Alikhan Smailov.

Sadati-Nejad and Smailov held talks before the two countries’ joint meeting to discuss major areas that should be agreed upon in the event’s concluding document.

Speaking to the press after the joint committee meeting, Sadati-Nejad said that according to the signed memorandum of understanding (MOU), 30 percent of the trade between the two countries will be in the field of agricultural products.

According to the agriculture minister, the two countries are also going to establish a commercial-agricultural joint venture in order to develop trade in the Persian Gulf countries, Central Asia, and West Asia.

In this meeting, Amir Yousefi, the vice-chairman of the Agriculture Committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) also said that Kazakhstan is a good option for extraterritorial cultivation due to the good water conditions and the quality of soil, which should be considered by Iranian investors.

Reaching $3b of annual trade on agenda

Speaking on the sidelines of the meeting, Sadati-Nejad announced that the two countries have put an annual trade of three billion dollars on the agenda, expressing hope that signing the comprehensive MOU would pave the way for achieving this target.

“The presidents of the two countries have aimed to increase the level of trade to three billion dollars; currently this number is around 500 million dollars,” the minister said.

Mentioning the developments in the two countries’ banking relations, the official said that the expansion of relations in the agriculture sector is of special importance for both sides.

He further noted that a joint committee will be formed in the next month to pursue this goal, saying: “Kazakhstan has requested Iran’s engineering services in modern irrigation and desalination areas, and we have expressed our readiness to provide them with the mentioned services.”

Iranian trade center to be opened in Almaty

During the meeting of the two countries’ expert committees which was held prior to the main event on Wednesday, Amir Abedi, the head of the Iran-Kazakhstan Joint Chamber of Commerce, announced that the business office of Iran-Kazakhstan joint chamber will soon be opened in Almaty.

Pointing to the capacities of Iran and Kazakhstan for the development of economic relations, Abedi considered Kazakhstan’s market as a strategic destination for Iranian businessmen.

The 17th Iran-Kazakhstan joint economic committee meeting was held about a year ago in Tehran.

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The importance of Iran’s membership in the SCO

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The members of Majlis (the Parliament) have approved the emergency of the plan of Iran’s commitments to achieve the position of a member state in the Shanghai Cooperation Organization (SCO), – informs IRNA from Tehran.

The  emergency plan was endorsed with 161 votes in favor, two against, and three abstentions.

Ali Adyani, the deputy vice president for parliamentary affairs, said that the plan was proposed by the Ministry of Foreign Affairs, which was endorsed by the cabinet members, and sent to parliament to become law.

According to the official, Iran’s membership in the SCO is of great importance in terms of economic, social, and international affairs particularly because the opportunity would help the Islamic Republic get rid of illegal sanctions and enhance economic diplomacy.

Iran has been an observer of the SCO since 2005. Then, President Ebrahim Raisi called for full membership of the Islamic country in the organization in its last summer summit in Tajikistan.

The legislators have accepted to speed up scrutinizing the plan. Earlier, the Iranian parliament had endorsed the plan of accession of the Islamic Republic to the SCO.

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Sabah: ‘The Americans have deceived themselves, the Europeans and Ukraine’

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The US is repeating the same mistakes as in Iraq, Afghanistan, Libya and Syria. Now – in Ukraine. So it seems inevitable that Washington will face another setback as a result of its ideological obsession, – writes prominent Turkish observer Bercan Tutar at “Sabah” newspaper.

Having suffered a complete failure in the Middle East wars, the Americans sent to Ukraine not only their ineffective weapons, but also their inadequate thoughts and strategies. But no matter what they do, their chances of defeating Russia are very slim.

The 330th day of the war, which began on February 24, 2022, has already been completed. After a short retreat, Russia began redeployment. However, the fact that Russia abandoned the siege of Kyiv and focused on control over Russian-speaking regions led Ukrainian leader Volodymyr Zelensky and the United States to false conclusions.

Encouraged by Russia’s cautious military actions, the United States applied its strategy in the war on terrorism in Ukraine and. According to American experts, the current US administration is following the deadly tracks of previous military propaganda in Ukraine, which proved unsuccessful in Afghanistan and Iraq.

While Russia is pursuing a military strategy that prioritizes its political goals, we see that the US is lacking in both military and political leadership. As soon as the war in Ukraine began, the first goal of the US was to rally its NATO allies against the Russian invasion. It was a smart strategy and it worked.

However, when the US reached the first target, a further one only increased its expectations. Russia was asked to leave not only Donetsk and Lugansk (Donbass), but also Crimea. Even further, the United States began to voice maximalist demands, such as regime change in Moscow. But it is absolutely clear that these demands can arise only in conditions of a total world war.

As a result, American fantasies lead Washington to attempt strategic suicide. The Americans have deceived themselves, the Europeans and Ukraine.

Russian leader Putin said on the occasion of the 80th anniversary of the breaking of the blockade of Leningrad: “We tolerated it for a long time and tried to come to an agreement. As it has recently turned out, they were messing around with us; they were lying to us. This was not the first time this has happened to us. Yet we did everything in our power to settle the problem peacefully. It has become obvious now that it was an inherently impossible mission; the enemy was only preparing to bring this conflict to the hot phase. As I have said, there was no other way than to do what we are doing now.”

In short, some geopolitical officials in the US have dragged Zelensky into a ‘no-win war’ against a nuclear-armed Russia.

Now the world is focused on two options:

– either the US and its allies will perform a ‘miracle’ in Ukraine;

– or the Russians will crush Ukraine and then break the back of the NATO alliance.

Thus, the US strategic position in Europe will come to an end and a new world order will be born, perhaps with several centers of power outside of America.

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