Chartered Accountants Ireland under the auspices of the CCAB-I responded to the OECD consultation on possible solutions to the tax challenges of digitalisation. The key observations of the CCAB-I response are as follows:

• We have concerns on the appropriateness of market size as a measure of profit allocation or taxing rights;
• Established international tax rules, such as the arm’s length principle, should not be discarded in seeking a solution to the challenge of taxing the digitalised economy; and
• The level of administrative burden for taxpayers and tax authorities on implementation of the various proposals in the consultation document is also of concern.

The outcome of this review may give rise to significant changes to international tax rules relating to the attribution of profits for intangible assets linked to the user market. Such a change could have a disproportionate impact on Ireland as a small open exporter economy and this concern forms the main basis of the CCAB-I contribution to the consultation.