Latin America’s Digital Economy and Trends in International Taxation

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As with many other parts of the world, the economies of Latin America and the Caribbean are fast becoming digitized, leading to a host of unforeseen challenges for governments. According to a recent OECD report, in one critical area, taxation, global consensus remains elusive on whether and how to tax businesses with a substantial digital footprint but no physical presence in a given country. New business models have disrupted entire industries and created what many nations see as a mismatch between taxation and value creation for digital activities.   

Some Latin American countries have begun proposing measures to address the problem. In January, for example, Chile’s finance ministry said it is considering a 19 percent tax on multinational e-commerce companies, such as Amazon, Netflix and Uber, which would mirror the value-added tax that Chilean companies pay. Critics of country-level proposals to tax service providers abroad say such measures don’t take into account the complexities of the international tax system which could lead to unintended consequences, such as shifting more taxes onto consumers or double-taxing corporations. Some of the region’s finance ministers are struggling with fundamental questions about the future of international tax policy in the global digital economy.

Our meeting will address several timely questions, including: What issues are driving the debate over taxation in the digital economy? Have Latin American governments started to take the right steps? What proposals and practices from other parts of the world might best inform Latin America’s plans for a new era of digital taxation? What potential pitfalls and unintended consequences should finance ministries of the region be thinking about?

Follow this event on Twitter at #LADigitalTaxation and @The_Dialogue.

A light lunch will be served. 

Speakers:

Karim Lesina

Senior Vice President, International and Regulatory Affairs, AT&T Services Inc. (@Karimlesina)

Grace Perez-Navarro

Deputy Director, Center for Tax Policy and Administration, Organization for Economic Cooperation and Development. (@GPerezinParis)

Luis Alberto Rodriguez

Deputy Minister of Finance, Colombia (@RodLuisAlberto)

Ubaldo González

Senior Sector Specialist in Tax and Administration, Inter-American Development Bank (@ubaldogdf)

Moderator:

Michael Shifter

President, Inter-American Dialogue (@MichaelShifter