Ms Olivia Buckley:

If I might come in on that, it is a very interesting way to look at the scope of what the EU is doing versus the scope of what the OECD is looking at. If one looks at the interim report, it is fair to say there is a much greater deep dive and wider breadth of analysis in, first of all, looking at the characteristics of digitalised businesses. One element of it is data usage, number of users and the role they play, and value creation. It is also saying, however, that we need to look more broadly to recognise other aspects of innovation, design, patents and IP which have been shown globally to have become an increasing part of digitalisation. If one looks only at user participation, the debate about how much value that creates and its allocation, there is a recognition absolutely by some countries of the role that plays but also looking at a wider breadth. It raises the point, interestingly, that one can have companies which are highly digitalised but which have no relationship with the number of users or data participation. An example is cloud computing.

One of the things we learned from the first phase of BEPS was that there was a universal acceptance that the rules had become broken. They creaked and did not match the pace of globalisation, world trade and the way in which business models were changing. If we have learned anything, it is what the OECD is highlighting to us; it is not just a quick fix for today. The World Economic Forum is telling us that the pace of transformation is at a rate we have not seen before and the trend is going to continue. The system has to be durable so that we do not find within ten years that we have developed a framework that is broken and which has failed to match the pace of change. The OECD is looking at value creation in a much broader sense and we have to appreciate that this is the breadth and scale we have to look at if we are going to have durable rules which pass the test of time. We want to get this right. If we were building any other kind of infrastructure, in particular physical infrastructure, we would ask ourselves whether it was going to last and stand us in good stead in 30 years time. That is the question we need to ask of our tax infrastructure.