Today is the first OECD Tax Certainty Day. We have asked some of our authors for their thoughts on the topic.

One of my fellow panellists at last week’s IFA Congress in London made this pertinent observation. In its work on developing a global anti-base erosion proposal (Pillar Two in the digital economy Programme of Work), the OECD has the unenviable task of toeing the fine line between theoretical purity and workability. They have to find a set of measures and proxies which can make a minimum tax possible to administer in a range of very diverse jurisdictions.

Dominic Robertson, Slaughter and May

Not having seen the MAP statistics yet, it is evident though that unless the effectiveness of MAP and other dispute resolution mechanisms are greatly improved, allowing market countries to tax some of the ‘residual profits’ realized in the digitalized economy is going to significantly increase the incidences of double taxation. Improvement of DRMs is badly needed ahead of the implementation of Pillar One!

Maarten van der Weijden, De Brauw Blackstone Westbroek

Tax administrations play a pivotal role in achieving tax certainty. Controversies and uncertainty as to their outcome reduce confidence in the integrity of a tax system. The OECD can do a lot to improve tax certainty, not only by promoting MAPs, but also by increasing its efforts on the development of a common interpretation of new international standardized tax laws. Moreover, penalties should not be applied until there is certainty as to the exact scope of application of the rules: this should become another international standard.

Andrea Manzitti, Bonelli Erede

German tax authorities are piloting projects on joint tax audits. Taxpayers with activities abroad should welcome this. Double-taxation is an increasing risk in times in which domestic tax authorities are pushing harder to secure what they consider their fair share of taxes. Joint audits may reduce the risk of double-taxation at the outset.

Markus Ernst, Hengeler Mueller