Businesses Fear Breakdown In BEPS Consensus
The International Chamber of Commerce (ICC) has expressed concern about the possible broader implications of the European Commission’s (EC’s) ruling against Apple.
In a statement published on September 1, the ICC warned that unprecedented rulings of this nature fall outside the scope of the recommendations of the OECD’s base erosion and profit shifting project and threaten to destabilize the international consensus working towards harmonized implementation of BEPS measures on a global basis.
“While we respect the enforcement of state aid rules by the EC, we believe that the Commission should ensure the integrity and legal certainty of the tax system, which remains critical for businesses seeking to invest in the EU,” said Christian Kaeser, Global Head of Tax at Siemens and Chair of the ICC Commission on Taxation.
The ICC said that coherent and coordinated implementation of the internationally agreed guidelines across all countries and in close cooperation with business is imperative in order to align tax systems, protect government revenues, and safeguard cross-border trade and investment.
The increased uncertainty likely to be brought about by the Apple ruling also highlights the need for international dispute resolution mechanisms to be put in place, the ICC argued.
Kaeser added: “Business fears the potential precedent and the legal uncertainty set by rulings of this nature as well as the possibility of counter actions that could undermine the consensus approach achieved within the context of the BEPS project and thus negatively impact cross-border trade and hamper foreign direct investment.”
Paul Morton, Vice-Chair of the ICC Commission on Taxation, said: “This ruling brings to the forefront the ever-more pressing need to have effective dispute resolution mechanisms in place to address potential tax disputes and strengthen global efforts to establish a consistent international tax landscape.”