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Australia will Not Proceed on Interim Digital Services Tax — Orbitax Tax News & Alerts

Australian Treasurer Josh Frydenberg has issued a release announcing that the Government will not proceed with an interim measure for the taxation of the digital economy, such as a digital services tax. The decision follows a review of feedback to a consultation launched in October 2018, which overwhelmingly supported Australia continuing to engage in the ongoing multilateral process on the digital economy led by the OECD. In particular, significant concerns were raised on the potential impact of an Australian interim measure across a wide range of Australian businesses and consumers, including discouraging innovation and competition, adversely affecting start-ups and low-margin businesses, and the potential for double taxation. Given this feedback and recent international developments, the Government has decided to continue to focus their efforts on engaging in the multilateral process and not to proceed with an interim measure at this time.