OECD-Led Tax Reforms: A Prescription for a Less Competitive Economy

12 Pages Posted: 25 Jun 2019

See all articles by Constantin Gurdgiev

Constantin Gurdgiev

Trinity College, Dublin; Monfort College of Business, University of Northern Colorado

Date Written: June 18, 2019

Abstract

This note reviews May 2019 OECD framework agreement report, “OECD/G20 Inclusive Framework on BEPS: Progress Report July 2018-May 2019” on international taxation of the ‘digital economy’. The core conclusions of the review are:

1. The framework agreement proposals to-date represent complex, ambiguous and uncertainty-rich set of taxation reforms that pose serious questions about their potential effectiveness and impact on the advanced economies;

2. The framework agreement proposals represent a direct challenge to the national sovereignty over taxation and fiscal policies, including policies aimed at domestic economic development, support for the free capital mobility and promotion of the research and innovation-intensive growth;

3. The framework proposals represent a significant risk of skewing international markets institutions in favour of larger Multinational enterprises (MNCs) at the expense of smaller, younger and more competitive and more innovative firms; and

4. The framework proposals represent a significant risk of increasing monopolisation and monopsonisation of the modern economies.

Keywords: BEPS, Base erosion, digital economy, taxation, multinational enterprise, multinational corporation, FDI, foreign direct investment, globalisation, international taxation, tax avoidance, tax evasion

JEL Classification: E22, E29, E61, E62, F23, F53, F55, F68, H21, H22, H23, H25, H26, H32, K41, K42

Suggested Citation

Gurdgiev, Constantin, OECD-Led Tax Reforms: A Prescription for a Less Competitive Economy (June 18, 2019). Available at SSRN: https://ssrn.com/abstract=3406260 or http://dx.doi.org/10.2139/ssrn.3406260

Constantin Gurdgiev (Contact Author)

Trinity College, Dublin ( email )

Trinity College
Dublin 2

Monfort College of Business, University of Northern Colorado

800 17th St Campus Box 128
Greeley, CO 80639
United States

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