Santander Bank has presented allegations in the public consultation launched by the Organization for Economic Cooperation and Development (OECD) to the document Addressing the tax challenges of the digitalization of the economy, in which this organization establishes alternatives to adapt the tax system to the new digital economy and advance in a tax on digital services, baptized popularly as Google rate.
The orgamism chaired by the Mexican Ángel Gurría celebrates on Wednesday and Thursday a conference to analyze the allegations presented by the stakeholders and try to advance in the new tax system for the digital economy.
In its arguments, Santander points out that "All companies must pay their fair share of taxes where they make the benefits so that governments can provide public services and security to citizens." And adds: "We support a consensus-based solution for tax allocation rights through a framework that is fair, equitable, consistent and consistent, easy to implement and manage by companies and tax authorities. This framework should include measures to prevent double taxation and a robust instrument for resolving conflicts. "Santander underscores the importance of meeting the schedule set by the working group so that by 2020 a consensus can be reached on a long-term solution for the challenges derived from the digitalization of the economy.
The president of Santader, Ana Botín, has been forceful about the need for large technology companies to pay taxes. In his last public interventions he has charged against them for "not paying a fair share of taxes" and has demanded a fair fiscal framework for each sector to pay according to where it generates its profits. "I do not ask that digital activities be taxed, I advocate a fair and equitable tax system, that there is reciprocity, that is, that the same services have the same rules in all senses. be, "he said last November.
The only great Spanish company
Santander is the only large Spanish company that has submitted allegations to the OECD document and has participated in this process to create a common framework on digital taxation. A total of 212 large companies, consultancies such as the big four (KPMG, Deloitte, EY and Pwc), law firms, lobbies to reduce the tax burden on companies or to raise it have submitted allegations to the OECD document. Santander is the only large Spanish company that has participated in this exchange of opinions with the OECD, which has become the driving force behind the new international taxation. Among the digital companies that have presented improvements or objections to the proposal of the body chaired by Ángel Gurría include Booking, Uber, Blablacar, Spotify, Zalando, the pharmaceutical company AstraZeneca, Carrefour, IATA, Procter & Gamble, Vodafone or Volvo.
The OECD document was presented on February 13 and, in summary, presents three proposals to tax the so-called GAFA (Google, Amazon, Facebook and Apple). The difficulty for large digital companies to take advantage of the twists and turns of the laws of different countries to minimize their tax bill, or the complexity of defining the characteristics of the digital business has led the OECD to propose three alternatives to tax more These companies. "In this consultation document, which presents a series of proposals that could be part of a long-term solution to the broader challenges that arise from the digitalization of the economy and the outstanding issues of BEPS (the acronym in English of Erosion of Taxable Bases and Transfer of Benefits.) The proposals are in the policy design phase and, therefore, their description has been maintained at a high level, "says the 32-page OECD report.
The three proposals
The first proposal would be to base the tax on the "User participation". This proposal focuses on the value created by certain highly digitized companies through the development of an active and committed user base, and the request for data and content contributions.
The second proposal consists of tax "marketing intangibles" or advertising. Like the previous proposal, it would change the allocation of benefits and the nexus rules. But unlike this it was not intended to apply only to a subset of highly digitized companies. Instead, it would have a broader scope in an effort to respond to the broader impact of digitization on the economy.
And the third, based on "significant economic presence". This proposal seeks to define the concept of "significant economic presence" to tax companies where they generate their business. "This proposal is motivated by the opinion that the digitalization of the economy and other technological advances have allowed commercial companies to be involved to a large extent in the economic life of a jurisdiction without a significant physical presence," the document said.
Santander prefers the third option with nuances
Santander claims to prefer the third "significant economic presence". In his allegations he explains: "This third proposal could be closer to embodying the principles described above. However, the proposal lacks fundamental details, including the parameters that would define the concept of significant economic presence, analysis of results and implementation. "And he concludes:" As the Working Group on the Digital Economy of the OECD continues its work , could be based on the concepts of user participation and intangible marketing of proposals 1 and 2 to define these parameters, as well as referring to elements of the proposal of the European commissions on significant digital presence ".
The European Union rejected this week the Google rate for the blockade of four countries (Ireland, Denmark, Sweden and Finland). The promoters of the rate now entrust the implementation of this tax to an agreement within the framework of the OECD at the end of 2020. The European Commission and several of the countries driving the rate, such as France and Spain, lamented "lost opportunity".
The Government of Pedro Sanchez had planned to approve a rate on digital services, based on the Google rate, but the rejection of the 2019 Budgets and the call for elections have postponed the decision. However, both the Minister of Economy, Nadia Calviño, and his colleague of the Treasury, María Jesús Montero, have assured these days that they will keep their proposal as soon as the elections pass if they manage to stay in the Government. Do not forget that Minister Montoro (PP) was the first to put this digital tribute on the table.