The agreement recently reached by 137 countries to reform the international tax system is probably the most important in a century. This is what the most reputable tax experts from around the world have been saying since the signing of the agreement in October. With this agreement, the international community responded to important challenges that have become even more pressing in the digital age. This issue was debated by the experts gathered together by the IEB at the presentation of the IEB Report 3/21 “The impact of digitization on tax systems”.

Although the agreement represents a large step forward for international trade and taxation, Michael Devereux, director of the Oxford University Centre for Business Taxation, considered that “it remains to be seen how the details are finalized in the coming weeks and months”, and that in his opinion “these details are not minor”. How they are dealt with will affect the two pillars on which the agreement is based: on the one hand, the aim of guaranteeing a fairer distribution of profits and tax rights among countries with respect to the largest and most profitable multinational companies; and, on the other, the introduction of a global minimum corporate tax rate of 15% that will be applied to companies with revenues of more than 750 million euros.

Along the same lines as Professor Devereux, Luis Jones, head of AEAT’s National Office for International Taxation, noted that “the agreement does not mean that all the problems have been solved”, but he was optimistic that this is “the way to the solution”. Similarly, Jones wanted to focus on “the importance that the technical scaffolding will have for the agreement to work in practice”. These views were supported by the other two experts who participated in the session: Ana Cebreiro, head of international taxation at the World Bank, and Joan Hortalà, partner at Cuatrecasas.

The IEB Report 3/21 “The impact of digitization on tax systems” was coordinated by José María Durán, professor of Economics at the UB and researcher at the IEB. The document has input from Michael Devereux, director of the Oxford University Centre for Business Taxation; Federica Liberini (University of Bath); Andrea Lassmann (University of Mainz); Antonio Russo (Loughborough University); and Rex Arendsen (Leiden Law School).

In this document, the IEB analyses the impact of digitization on taxation, in terms of both the design of taxes to be paid by companies and the effect on the tax offices in charge of ensuring compliance with these taxes.