Mr. Paul Tang:

We think the CCTB is one of the proposals that can make the change. It is not the only thing we need, however. The reason we think it is important is that it changes the rules of the game. Now it will be up to firms to decide the location of their profit through constructions, transfer pricing and so on. If one wants to have one's costs in a high-tax country and one's revenues in a low-tax country, this game should be changed. If the countries decide where profits are being made and where they are being taxed, one changes the game. While that is an important change, it is not enough. A global framework is needed. I have been arguing that we need Europe to help set the global standard. The OECD is still very welcome but it has its disadvantages. It is very much divided when it comes to taxing the digital economy. There is a conflict of interest there between the US and the EU; Google and Facebook are American-based, after all. Consequently, one cannot expect the OECD to move on that.

More broadly speaking, not everyone is at the table in that regard and less-developed countries are not very well represented. A person from the IMF confided in me that African countries should not sign up to tax treaties, although I do not think that is official policy of the OECD or IMF, which usually say a country needs to sign up and become part of the global framework. However, the official said that because he does not believe that the tax administrations in such countries are a match for the lawyers of big corporations. That is why I do not think the OECD at this stage is ideal. There is clear conflict between the United States and the European Union, as well as the fact that it is not really global although, at the end, it is a very good framework. If one goes global, one goes global but that should be done through an active European Union. That is the way forward for which I would have most hope.