Dr Leopoldo Parada's opinion on EU digital levy plans featured in Law360
Dr Leopoldo Parada's opinion was extensively featured on the US specialised media outlet Law360/Lexis Nexis in regards to the plan of the European Union to impose a digital levy.
This levy comes after countries have just finalised a global tax agreement, raising questions about the possible mechanics of the EU measure as well as its uncertain future.
Consulted about the role of this European proposal and its impact on the OECD global agreement, Dr Parada said, "EU leaders may have thought a proposed digital levy would put pressure on discussions at the OECD, while also functioning as a solution if negotiations fell through".
He also added that the EU strategy was smart because if nothing happens globally "voilà!, we have this magical blocwide digital levy to save us, despite not knowing what the levy will look like yet".
Similarly, consulted about the idea of countries repealing their national tax measures (digital services taxes) if a global agreement is achieved, Dr Parada said, "repealing unilateral DSTs won't be an easy task... indeed, there's only ‘a gentleman's agreement’ on removing them after a global agreement is achieved.
“Whether countries repeal their DSTs will depend in part on the difference between DST revenue collection and what Pillar One offers".
He added, "we could expect that many of them will repeal their DST if the global deal is capable of offering them something slightly better – or not so dramatically worse – from what they have achieved so far. If the OECD, and the inclusive framework, succeed in this task, the fact of collecting less revenues right now can go to a second level of importance.
“However, we need to hear more about the numbers and the potential revenue impact that Pillar One will have on market countries".
Read the full article [behind a paywall].