OECD: Digital platforms have an important role to play in VAT policy & can assist tax compliance efforts
The digital platforms that have fueled the growth of the sharing and gig economies have a role to play in value-added tax (VAT) and goods and services tax (GST) compliance and administration, the OECD said in a report released April 19.
“The opportunities offered by digital platforms and big data have enabled individuals and businesses to connect with consumers and provide services to them on a larger scale than ever before. Through these new technology-enabled enterprises, tax authorities worldwide have far greater visibility of previously informal activities, creating new opportunities to enhance tax compliance and ensure the effective collection of VAT/GST in this rapidly growing part of the economy,” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration.
The OECD report is intended to respond to governments and tax authorities that have asked how to protect their VAT and GST revenue considering the changing business conditions and how to minimize any economic distortion that could result from disparate treatment of providers operating in the gig and sharing economy.
The OECD report’s recommendations reflect the consensus of VAT and GST authorities worldwide and input from other key stakeholders.
The report is the result of an inclusive process, involving consultation with representatives from more than 100 delegations from countries, jurisdictions, and international organizations, as well as representatives from the business community and academia through the OECD Global Forum on VAT.