by Terrance Hunsley

US Treasury Secretary Steven Mnuchin has sent the letter copied below (apologies for poor visibility – technical issues) to counterpart ministers of the UK, France, Italy and Spain. He calls for a slowdown of efforts to forge an international consensus for fair and effective taxation of global corporations whose business presence is primarily digital. Many of these high-tech industries are based in the USA.

This appears to signal a serious undermining of OECD-lead efforts to tax “aggressive international tax avoidance”. Canada has been part of a broad project referred to as BEPS – (base erosion and profit-shifting) and adopted legislation in 2019 to support the initiative and implement a multilateral instrument.

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (also known as the Multilateral Instrument or MLI) is a global initiative developed by over 100  jurisdictions to counter tax avoidance strategies that lead to base erosion and profit shifting (BEPS). BEPS refers to international tax planning used by some corporations and wealthy individuals to inappropriately shift profits to low-tax or no-tax locations, to avoid paying their fair share of taxes. (Finance Canada website)

The copy of the letter comes from the blog of Allison Christians, a tax law professor at McGill University  https://www.allisonchristians.com/blog/mnuchin-letter-digital-tax