Israeli Finance Minister Avigdor Lieberman on Tuesday announced that the country will join the digital economy taxation outline initiated by the Organisation for Economic Co-operation and Development (OECD) and the Group of Twenty (G20) forum.

The decision was taken ahead of the expected outline’s approval on June 30 by a designated OECD committee, said a statement issued by the Israeli Ministry of Finance.

The plan will allow taxation of corporations’ profits by countries whose residents consume their products or services, even without a physical presence of the companies in those countries.

It also aims to end the “race-to-the-bottom” in corporate taxation by preventing the eroding of tax base and the shifting of profits to tax havens.

The outline states a minimum tax rate that will apply to corporations that have a total annual turnover of at least 750 million euros.

Taxation of the digital economy is the first part of the BEPS (Base Erosion and Profit Shifting) program initiated by the OECD and G20 to address the tax planning of multinational corporations.

“The economy is becoming more and more global, and we must take policy steps in cooperation with other countries. The new outline will allow Israel to receive income from the giant companies for income from their activities in the country,” said Lieberman.
Source: Xinhua