The OECD has drafted a set of technical principles which could raise $100bn (£76bn) in global tax revenues from ‘big tech’ groups such as Google and Amazon.
The organisation has consulted with multiple countries on the reforms, which would allow tax authorities to collect up to 4% more corporate tax from tech companies.
However, an international deal on tax changes has been stalled by the US and will not be considered until after the country’s presidential election.
Carol Stubbings, PwC global tax and legal services’ leader, said: “It’s welcome that so many countries, especially during the pandemic, remain committed to seeking a multilateral solution to these important issues.
“However, with the detailed blueprints, it is clear the differences between many countries will require further time, and compromise, to reach resolution. Much of the complexity in both pillars needs to be addressed, otherwise these proposals could unduly burden countries and taxpayers alike.”
She added: “This could make consistent and coherent implementation impossible, which will frustrate the ultimate goal of achieving a truly multilateral solution.”
Charlotte Richardson, UK tax partner at PwC, said: “This new framework has the potential to be a once in a lifetime change to the corporate tax system.
“If agreed, it would potentially remove the highly distortive, gross base taxes such as the recently introduced UK Digital Services Tax (DST) and address the prospect of double taxation. In doing so, this could overcome a significant stumbling block in any UK-US trade negotiations.”
She added: “Nonetheless, there is still a long way to go and the complexity and implementation challenges shouldn’t be underestimated. This is particularly important for UK businesses which not only have to adjust to a post-pandemic world but also to a post-Brexit environment.”
