 It is a pleasure to be joined today by Pascal Santaman, Director of the Centre for Tax Policy and Administration at the OECD in Paris. We would like to thank him for taking time out of his schedule within weeks of a G20 meeting of finance ministers in which he will participate, to speak to us today on the ever more topical issue of taxing the ever-expanding digital economy. Before the talk, some brief biographical information. A French national, Pascal joined the OECD in 2007 and has been in his current high profile role since 2012. He spent the first decade of his career as an official in the French finance ministry where he held various positions, including heading the supervision of EU work on direct taxes, overseeing legislation and policy on wealth tax and mergers, and leading international tax-treating negotiations. He is a graduate of the highly prestigious École Nationale d'Administration. Pascal will speak to us for about 25 minutes or so, and then we will go to Q&A with our audience. Submit questions and comments via the Q&A function on Zoom, and please type in your affiliation so that you can be identified. If you are tweeting, you might also type at IIEA into your tweet. Today's presentation and Q&A are both on the record. With that, thank you Pascal, over to you. Thank you very much, Dan, and good afternoon to all of you. Very happy to be with you, even though as usual now, unfortunately, very frustrating that to meet in person, the interaction is not the same, but we do what we can. So very happy to be back to Ireland and happy to brief you on the latest on our project where we stand and what's next. To start with, to set the scene, some retrospective view on why we are where we are today. I would say that all that is linked to another big crisis, the global financial crisis, 2008. So it's now around 10 years that things have been changing in international tax because the global financial crisis, I think, triggered some form of change of paradigm in international taxation. International taxation had been quite quiet for decades since 1928 and the League of Nations Model Tax Convention, and the policy, the international tax policy, was actually left to tax treaty negotiators or transfer pricing people who were all working within the box, within the frame, which had been fixed by the League of Nations and then by states, by governments in their bilateral treaties. 2008 is something like a wake-up call, but there has been globalization, financialization, the suppression of most of the obstacles for free trade and the offer of financial services. And as a result of globalization, without any form of tax coordination, the number of governments realized that there was an issue with tax avoidance, with tax fraud, tax fraud from individuals, tax avoidance from companies, and that something had to be done. And the reason why they thought so intensely that something had to be done is that to pay for the crisis, to buy it out to the international, the financial institutions, they had to put a lot of money on the table, and this was public money, and they realized that they were putting a lot of public money, in other words, money coming from the collection of taxes, to help banks which had held taxpayers not to pay their taxes because of offering bank secrecy. So you have this moment of awareness, of waking up, kind of, and the G20, which has been established precisely to manage all that, telling the OECD Act. We did the first phase, which was attacking bank secrecy, fiduciary secrecy, making sure that there would be tax coordination. The second phase started in 2012 with what we have called the BEPS project in Ireland. I don't need to spell out BEPS, you know, what it is. So we launched that and we delivered in 2015. Now, one can say good things or not as good things as I would like on BEPS. There are some successes. There are some things which probably didn't work as well as they should have. But for sure, I would think that we had a change of paradigm of the tax behavior of multinational companies, of the tax behavior of tax administrators, and of the fact that politicians all over the world got interested and actually sometimes excited about international tax. What we left open in 2015 when delivering the BEPS package, the 15 reports, was precisely on action one. You may remember that when we started BEPS, we said, and it was somewhere in the chapel of the action plan, we are not going to touch on the allocation of taxing right. That's something that BEPS is not going to tackle. BEPS is about closing down loopholes. BEPS is about the elimination of double non-taxation, but it's not about the reallocation of taxing right. But the action one report, which was about the digital economy, actually brought some interesting conclusions. One of the conclusions was, there is no such thing as the digital economy. We should not reinforce the digital economy, but instead address the tax challenges of the digitalization of the economy. And we at the OECD were very keen to keep that expression, that sentence intact, because we think it's indeed a question which goes much beyond a few companies. By the way, when you try to draw the border, it's not really easy. The second main conclusion that few people actually saw was about the fact that the challenges of the digitalization of the economy were more related to a question of taxing right allocation rather than a BEPS type of measure. So we said at the end of the action one report, one weekend of Trinkfenst, two BEPS is going to address part of it. You may remember, especially in Ireland, that a number of these tech companies, very successful, very large companies, were able to benefit something like double exemption. Ireland is well known for offering some menus or some sandwiches from the menu of the tax offer. So you had BEPS, obviously, used by these companies with two trillion US dollars of accumulated profit of US companies in Bermuda, most of them being channeled through Ireland or through Luxembourg or through the Netherlands. So the first immediate conclusion of the BEPS action plan one was, let's wait and see what the implementation of the BEPS measures will do. But you also had this point to say that there is an issue, and this issue is about nexus and profit allocation. And that we don't deal. And especially as the US at that time was not in a position to agree the work stream on this. That's where we left it. Then we established the inclusive framework for BEPS implementation. We had some institutional work to do to make sure that we would have inclusivity, that we would have a process of implementing the BEPS measures, negotiating the multilateral convention, the so-called multilateral instrument, the MLI. So many things going on, but the frustration of many countries, not all, but many, I would say, most countries, about taxing digital activities was growing. So much as the German finance minister, Mr. Scheuble, when he took over the G20 presidency from China in 2017, he said, and that was the meeting of the finance ministers in Baden-Baden in February, we need to do something, let's mandate the OECD to produce another report. We cannot wait till 2020. So we started another report. And what was quite surprising and unexpected, let's say, was the fact that why the US new administration, the Trump administration was negotiating the US tax reform with Congress, we could see an opening from the US. I wouldn't have bet much on an opening from the US under a Trump administration, which is not necessarily a great supporter of multilateralism, that we would have an opening and we actually got the opening, which was to work on a solution. This is what we started in 2018. We issued a report and following exchanges, because many countries, I mean, you had different pockets of countries, you had one set of countries saying there is an issue, we need to address it, but it cannot be ring-fenced to the digital economies about nexus, but more fundamentally, it's about a profit allocation issue that we need to work out. And let's do that. And I think we could put in that category China or the US, or the US leading and China being aligned. We had a second bucket of countries saying, well, actually, it's a digital issue. It's nothing else but a digital issue. And as a result, we want a digital solution focused on digital. And third bucket of countries, which largely included countries, which until then thought there was no issue and no need to discuss anything, joined a slightly different position to say we may recognize that there is an issue, but there is no urgency and we're not necessarily keen on addressing it. I would put Ireland definitely in that category. Throughout 2018 and 2019, we worried this out in the G7, in the G20, in the inclusive framework at the OECD, including 137 countries on an equal footing through the task force of the digital economy, the different working parties. And out of that emerged the idea early in 2019 that we should have what we've called a two-pillar approach, one pillar being revisiting nexus and profit allocation, and one pillar being establishing a global minimum tax to put a floor at least to the rise to the bottom, to limit tax competition, to a threshold, which would be globally agreed. This idea being derived from the US tax reform and in particular the guilty global intangible low income tax. This idea of a two-pillar approach was agreed without prejudice because that meant the negotiation was going on, and that there was something like a package, some countries being more interested in pillar two, some countries being more interested in pillar one, and all agreeing that we should advance this agenda together. Throughout 2019 work advanced, but we were stuck on pillar one with this divide between basically the US, China saying it cannot be referenced, plus some other countries, the third bucket I mentioned too tended to join that view, and the large EU continental countries namely France, Italy, Spain, at that time the UK, which was still in the European Union, even though not continental, saying we should do something digital and digital only because what is new with the digitalization of the economy are the business models relying on users contribution. So we should be able to amend international tax rules to capture user contribution value creation. There is value created by the user contribution, either through platforms like Airbnb and so through an advertisement model like Google or Facebook, the focus was on that. And 2018-19 was a debate between these two categories of countries and we couldn't unlock the negotiation. That's why the OECD secretariat proposed, and that's not that usual, to try to come up with a compromise proposal, which we call the unified approach, unifying the different views expressed on pillar one, and in particular on the scope of pillar one. And you may have seen that the unified approach proposed a three tier architecture, first tier being for the companies dealing with digital activities, but also for consumer facing businesses, which reflected the views expressed by the US of the marketing intangible approach. So we said for that scope, we should have an allocation of the residual profit to be defined, let's say both 10% of the return, but the rate where to be negotiated, but above a certain level of profitability, a percentage of the residual return, one could say the excess profit, one could say the rent, I mean whatever language you use, we understand what we're talking about, a percentage of that 10, 20, whatever should be allocated to the market jurisdiction. And that's the change of the approach there, moving from existing transfer pricing to something which is new and is based on a formula. And there was consensus on this overall approach, noting that of course, this would take place with a new nexus rule, the new nexus being you can be taxable when you're foreign company in the country, even if you don't have a permanent establishment, the idea being that a sustained engagement in the jurisdiction would be good, what would be the sustained engagement most countries thought that a person, I mean, a certain level of turnover could characterize a new nexus. And some countries said we would need additional factor, but the conversation was there. We also proposed a second layer, which was a fixed return for routine distribution activities. And that was mainly for the benefits of developing countries and for the benefit of tax certainty. And the third layer, which was about tax certainty, to say if we have a new relocation of taxing rights to the market jurisdiction, the market jurisdiction should provide for better tax certainty, tax certainty, which could be improved by agreeing as early as possible, the amount A, the first layer, but tax certainty being also in case of a dispute to have something binding, compulsory, unlike mutual German procedure, which as you know, are just about countries endeavoring to eliminate the taxation. We table that we had, I think, pretty good reception by most countries, but the US Secretary for Treasury expressed the idea that this was fine, but going to Congress to move away from the Arslan principle moving away from the current definition, the permanent establishment will prove too much of a challenge. And he said we should move towards this approach, but on a safe harbor approach. And he further clarifying that safe harbor meant that companies would decide whether they would be in the scope or not of this new approach. And in what he explained to other countries, he said, well, we may have the existing system, but companies would be pushed towards the new system to the extent that the new system will provide more certainty. So the certainty may be a good incentive for companies to go. So it's not I have the choice to pay taxes or not, but I have the choice between two regimes, one of them providing more certainty, even though this regime would provide more taxing rights to jurisdictions, market jurisdictions. This, to say the least, was not very much welcomed by US partners. And it was decided after many exchanges and that the inclusive framework in January to move this issue of safe harbor to when we would look at the implementation. So in January, the inclusive framework said, okay, we endorse the unifying approach, we work on pillar two, there was no such thing as unifying pillar two. And we are going to develop all that technically with a program of work that everybody thought would not be developed on time because it's quite a challenge to write new rules which are completely, I mean, outside the box. We were there in the spring where COVID knocked the door and obliged us to confine to speak via Zoom and other means and not to be able to meet which clearly is a hurdle. Negotiating through Zoom is not easy. Working with the team, working within the secretariat is fine. We know each other, we know how to work together. Negotiating is something else because you need to give something up in exchange of something else, but you cannot do that in a plenary. Usually you do that in the lobby. You do that at the dinner before the negotiation or at the breakfast or at a coffee break. And what I like saying is Zoom is fantastic, but they don't provide the coffee. And without the coffee break, you cannot really advance the negotiation. So we've been delayed and instead of delivering in July, we said we would deliver in October. Here we are. We are two weeks, three weeks before the G20 Finance Ministers meeting on the 14th of October. What have we done? We have developed what we have called blueprints. And the G20 Finance Ministers expressed support to this idea of providing them with blueprints at their October meeting. This G20 statement was issued in July, a virtual meeting of the G20. So we have developed a blueprint for P1 and a blueprint for P2. Now, the blueprints are technical pieces of work. They are technical to the extent that we've explored how you would determine the residual profit, the questions related to sourcing the income, the question of defining the tax base, the question of defining what is a distribution routine distribution activity. The design of the tax certainty, both in the dispute prevention on amount A, how can you agree through a panel like ICAP, the amount among interested tax administrations, and how would you design something which would be compulsory, which would be binding, but which would not be arbitration, as this is a red line for many countries. So we've developed all that, and technically we've tried to advance as much as we could, including on the scope, which we understand has been, since the beginning, the tricky part with the U.S. in no-ring fencing. And with other countries saying, let's do a ring fencing, and the unified approach proposing this, and then the U.S. with a safe harbor saying, well, we don't really know how to handle this, unless we let companies to design. So we've tried to see what ADS, Automated Digital Services, could be defined. We tried to define what consumer-facing businesses would be, and what the issues would be in terms of business line segmentation. And so business line segmentation, how do you do a business line segmentation, how do you avoid doing business line segmentation, which could be heavily costly in terms of compliance costs. So we did all that work, and the end result, or the current result, is a set of chapters, 10 chapters, 450, maybe more pages of technical work. That's the blueprint on P1. Just to show that we're serious guys, we do the work, and the work has been done with the working parties. Now, the downsides of these blueprints is that some of the key political decisions, the key political parameters, what will at the end be the scope-like? What are the quanta? By quanta, I mean, how do you define the residual profit? How much of the residual profit would be allocated to the market jurisdictions? The level and the extent of tax certainty. All these questions are bundled. They're linked, and countries would not disclose their position. If I'm India, I will not say I'm ready to take these or that type of tax certainty. If I don't know what the next rule will be, and if I don't know what the amount will be transferred to India. You can see that you have something like a blockage in terms of disclosing all the elements so that you conclude the negotiation. That's a bit where we are. In other words, we have something which is almost ready for use, except that some of the key parameters need to be solved. We heard in June from the US that the US, because of the proximity of the US election, would not be keen on reaching an agreement on the 14th of October when you have a US election a couple of weeks later. The US clearly said, we are interested, we are not pulling out of the negotiation unlike what the FT reported more than once. That was not correct. Fake news, I would say. They didn't pull out of the negotiation, but they said, we don't necessarily want an agreement. Now, even though in July, the G20 Finance Minister's meeting, they let the door open, and even in the letter, which is not the public letter from Minister Secretary Minuchin, it doesn't exclude an agreement by air. There is clearly a level of uncertainty there, and that's why today I would struggle to tell you what kind of agreement will reach on the 14th of October, because ministers are now talking to each other. As regards Peter II, things were slightly easier to the extent that there was no unified approach. We just had to develop these technically, and wow, it's a challenge. It's extremely difficult. It's very complex, like Peter I. And we've advanced a blueprint with the same idea that technically, if we had to do a Peter II, if we had to design a global minimum tax with an income inclusion rule, with an under tax payment rule, with blending, with carve-out, with all the elements, including the possibility of a switch of rules and subject to tax rules, what should they look like from a technical perspective. And technical groups have come up, the technical groups have come up with the design of what Peter II could be. We today have two blueprints which have been sent to the inclusive framework, which will be meeting on the 8th and 9th of October. And these will be reported to the G20. I can tell you right now that we'll go public. I mean, we will go public, not you, the people who had leaked and then who tried to make it public. We will go public with all the inputs from all the members of the inclusive framework. And we've already incorporated the first set of comments from the full inclusive framework members. And now we are moving to a second round of comments on both pillars. We are going to present this publicly on the 12th of October. And this will be discussed by the G20 finance ministers on the 14th of October. What's next? It depends. It depends on the level of agreement. It depends on the political dynamic. You have some countries very much interested in Peter II. Germany is one of them. You have the US supporting Peter II. You have some countries, Ireland. I think it would be no surprise to say that I would anticipate that Peter I, you don't necessarily like much, but you can cope with why Peter II you don't like. Full stop. So how will the political dynamic in Europe and elsewhere articulate to be seen? But what I could expect is one that's easy. It's almost decided. We will go for public consultation of the two blueprints in October. The level of consultation may not be the same. Depending on the level of agreement on both, it was already decided that we would go on Peter II for public consultation on the simplification and administration measures. In Peter I, there are many technical aspects which definitely will gain from public input. So that's something we'll do probably till the end of the year. Second, and this is the case on many of the fronts, we will be waiting for the US election. It's important to know what the new administration will be. Is it renewed Trump administration, a Biden administration? And I would add what majority in Congress divided Congress, united Congress aligned with the White House or not. So you have different scenarios that I think US partners will have to play with and will have to wait for feedback from the US administration. Again, even a renewed Trump administration and then we should know, we should hear from them quite quickly or a Biden administration that will take time because we have a transition period and then the time for them to appoint new delegates will take some more time. Even though I understand that everybody in the US now understands that this is an important topic which doesn't come last. I mean, it's a topic which now is on the rather screen of politicians and will be on the rather screen of whatever new administration we have in the US. Beyond that, you may have seen the European Union. Speaking about that, there was an informal ecofin and I know Finance Minister's talked about that with the question of the OECD may fail to deliver a full-fledged response to the issue by the end of the year. But again, the circumstances which I have described may explain that COVID's proximity of the US election. What do they do? They said and that was the mission statement of Madame von der Leyen, the President of the EU Commission. We are going to act if the OECD fails. Now, the circumstances are slightly different but she said in our State of the Union address a few days ago, we may propose something early in the year. I think Mr. Gentiloni publicly said yesterday or on Friday that the EU will act but giving some time at the OECD to resume the negotiation and show what's happening there. So you can see that there is a dynamic in Europe. There is a dynamic in the US. We for sure at the OECD, we think that we now have a very solid basis for finalizing the negotiation when we have leadership, when we have leadership from the US on the digital topic, when we have leadership from European countries or at least those which sponsor the global minimum tax. When they act together, which I think they are currently doing, we'll see what the future will look like in terms of pillow one, in terms of pillow two, and in terms of the link between pillow one and pillow two, which so far have been a package, politically the package, why technically, policy-wise it's not a package. You have pillow one, you have pillow two and they're not really linked. They're linked politically because different governments made that link. That's where we are so you know almost as much as I do and I will be happy to take questions. Good. Thank you very much. I think that brought us all very much up to speed with how things are going. Could I start off by asking about the earlier evolution of the multilateralization of this? You mentioned that up until between 1928 and 2008, bilateralism dominated the dealing, the countries dealing with this and then it moved into a multilateral framework. At a time when we talk so much about the decline of multilateralism, do you think that your work and the countries involved with you around the world, this actually goes contrary to that claim that in fact multilateralism is alive and well? You're muted. That's a good question and I would think that tax, I mean you have something like a tax paradox. The global financial crisis, I think started that process of financial crisis followed by a fiscal crisis, followed by a social crisis, followed by a political crisis and you can see that in so many countries and the political crisis which follows all that cycle is largely about bringing nationalistic parties to the power, to the governments or not far. Including in the different, among the people, this feeling of we need to fight back globalization and so is largely shared. Ireland probably being an exception there because you have so much benefited from globalization. But in continental Europe, you can see it in the UK. I think we can see it clearly than anywhere else. So you had that cycle and the tax paradox, I think, is that tax is at the core of sovereignty and countries want to protect their sovereignty. The people want to be sovereign again. They don't want to leave it up to the European Union for the UK or to whatever international organization elsewhere. But in the area of tax, if you don't coordinate, if you don't practice multilateralism, you actually undermine your sovereignty. In other words, in a global economy, if a government wants to stick to its local sovereignty without any interaction with the others, this sovereignty will remain nominal but not real because it will be undermined by the tax offer of investment hubs, of small open economies. And large countries, and I would recognize that it's partly a large versus small country debate, the large countries understood that it was their interest to cooperate, to have multilateralism to protect their own sovereignty. So in a sense, and that's the paradox, multilateralism supports the strengthening of tax sovereignty. And that's why, in spite of this crisis, what we have seen is us building strong international multilateral instruments, the MLI, the MAC, a couple of others, and strong institutions, multilateral institutions, the Global Foreign Transparency 167 members, the Inclusive Framework 137 members. And not to do a talk show, to do peer reviews. And peer review is something a bit intrusive because you have peers looking at your system and evaluating you against the standard. But this has worked. Now we are reaching or we have reached the peak of, I mean the peak, we'll see what future looks like, but I think we can say that we've reached a level of pretty strong feeling against multilateralism. And in spite of that, the US has not pulled out of our negotiation and countries are engaged. It is true that we have hiccups. We have a number of countries thinking of or having introduced digital service taxes. I didn't mention the DSTs in my presentation, but the background of this multilateral election where a number of DSTs discussions in Europe didn't succeed. But in France, in Spain, in Italy, in Austria, in Turkey, in Korea, in many other countries where you have either measures introduced or government saying they will introduce measures. So that's the background, but which is also part of a negotiation. We want to weigh in the negotiation. We want to have our views reflected. And if not, we'll act unilaterally. So it's part of it. So to make it short, yes, multilateralism is in crisis. Yes, it does translate with some forms of hiccups in our negotiation. But fundamentally, we have built something strong, which I think is strong enough to resist this crisis of multilateralism. And the real basis for this is that protecting tax subsidies requires some form of tax coordination. Could I ask just how big a problem this is? Because when I speak to my French friends or my German friends, I get the impression often from them that they believe the tax revenues, the actual amount of money being collected by their treasuries from profit tax, is falling. But I always cite your organization's database, and that if you look at corporation tax revenues over the decades, relative either total tax take or relative to GDP, you don't see any change. Well, if you read our surveys, well, you will see that the relative stability of corporate income tax revenues in countries is a problem because the increase of the profitability of the largest multinational companies on the one hand, but also the increase of incorporations of activities which were not incorporated earlier should have translated into an increase of corporate income tax. So you have a gap. You have something which has been lost. One, two, in our evaluation, which was the most conservative possible of BEPS, we were at a quarter trillion every year. So this is not anecdotal. I can tell you that our findings were much, much higher. But the members told us, hey, let's not create expectation. Let's take the hypothesis which will yield the smaller amounts possible. So we are probably in half a trillion than the quarter trillion. Third, I would agree that if you talk about digital, it's clearly not what is going to pay for COVID. Obviously not. The amounts at stake are not that big. Even the European Union in what they have estimated for the DST was a few units of billions, I don't know whether it was three, four billion, but something which is very limited. So it's not digital which will pay for the crisis, but the overall regulation of fines against tax avoidance has several hundreds of billions at stake. And that's where a global minimum tax in our estimates, and we've made that public, and there will be a public assessment released on the 12th of October as well. But we are in the range of more than 50 billion a year, and probably more than that. So that's something worldwide. That's something which is significant on Peter 2. And Peter 1 is not about increasing the size of the pie. Peter 1 is about redistribution. It's no longer about companies paying taxes nowhere, the double non-taxation. BEPS has put an end to that. And in Ireland, you've seen an increase of your GDP of 26% a couple of years ago because of the on-sharing of activities which so far have been booked, if not happening in Bermuda and elsewhere. So it's almost embarrassing in the increase of GDP and the increase of corporate income tax is not necessarily the best news for Ireland, because it shows that there is a lot of things happening there. So Peter 1 is about reallocation. It's redistributional. But even in the redistribution role of Peter 1, what do we see? One that the overall revenue would increase because today, part of the residual profit is still booked in low-tax jurisdictions where it should not necessarily be booked in terms of tax policy. So there is not only a redistribution of around 100 billion from countries to other countries, but also an increase of the revenue collected. And when you combine Peter 1 and Peter 2, you have something which is significant, even though some developing countries may say, well, is there enough for us to go to that very complex system? And maybe the months we have in front of us waiting for the US to be back to the negotiation may allow us to think of how we could streamline all this. Maybe a follow-up question. Dermot O'Leary, an economist with Goodbody, a stockbroker, has modeling been done on the potential economic and fiscal implications in the various countries of different proposals. Can you comment on that? And Professor Frank Barry from Trinity College asks for a clarification on minimum tax. Is it per country or per company? The blueprint will describe what is contemplated, but the end result will be decided by members. So it's too early to say what the end result of the negotiation will look like. But on Peter 2, I think that the sponsors who have strong views on that would say that the blending should be per jurisdiction, so not per company, but per jurisdiction, versus a global blending, which is the current guilty where you have the average effective tax rate looked at putting all together all the non-US companies of the group, subsidiaries of the group. So the blending would be, I think, a jurisdiction, even though this is not yet decided, like other parameters. The reason why I refer to the strong views of the promoters is that on Peter 2, what you need to understand is we do multilateral action, but countries could actually move on their own, as the US did with Guilty. So you do not need a night pillow wand, a multilateral instrument. Maybe a multilateral instrument would be better for the coordination of the rules, the incoming prison rule and the under tax payment rule. But we think it's not absolutely necessary. So countries can move on their own. They will be much more effective, much more effective if you have a significant group of countries moving together. But after all, the subset of countries can do Peter 2. And I'm saying that because if there is no agreement on some of the key parameters, or some countries say we are not interested in that, if you have a coalition of the winning large enough to have an impact, you may have it. And that, in terms of negotiation, is something to be taken into account. Now, the first question, if I remember, was on the positions of the different countries. I've more or less described them, right? I mean, the US, I think, is one, if we look at the fundamentals, that's not given, given the environment, the US is supportive of a multilateral solution. The US business community said it, the US government said it. Pascal, could I just interrupt? I think the question was more in terms of a specific example, what percentage of existing corporation tax could Ireland, for instance, stand to lose under various proposals? Could it be 10% decline? Could it be a 50% decline? Could it have no effect? Could it actually increase? Then you need to ask the other Pascal, don't know who. It's an internal discussion. We have made estimates that we've provided to the members for them to work with their own data, and the members told us you can share global estimates, but please don't share our specific data because we're working on them and we may have our own views or our own way of communicating. So I will not be in a position to disclose country-specific data. But you're free to discuss this with your government. Ireland, I think it's no surprise to say so, is not a winner of this reform. That's quite intuitive to think so. Okay, okay. Former Finance Minister Alan Jukes asks, assume that the EU adopts a digital tax system and that the US, the UK, Singapore, China and Hong Kong do not. How will it affect the EU's competitiveness? And also a question, just a very small more statement. Farchi Akbar joins us from Indonesia. I think the first time that somebody joins us from that country asks or poses the point, do countries have the right not to tax digital companies? Okay, very different questions. The first question is about taxing digital. As I explain to you, what we are doing at the OECD is not about taxing digital. It's about renovating the international system so that we can address the tax challenges of the digitalization of the economy. And if there is an agreement, which I hope and think will happen, we will allow countries to levy corporate income tax on these activities. So there is no such thing as taxing digital. When one talks about taxing digital is by default, in case the OECD fails, you may have digital service taxes. As you have in France, in Italy, in Spain, in the UK going through parliament. And if you have a DST, you indeed have a specific dedicated taxation of gross income through a tax or turnover, right? Now, if the question is if some countries move and if the European Union establishes a DST, is there a risk of leakage of activities outside the EU? Well, if you do a DST, I'm not sure because a DST is based on turnover and you will always have clients whether it's taxed or not. The question is the incidence. Who is going to bear the tax burden? And you will have seen that Amazon recently, I think, said in the UK that the tax will be passed on to the consumers. And also Google and Facebook increased the price of advertisement to incorporate the DST in price. So I think the question is not that much Europe losing competitiveness because that's not the point there. The point is more whether these taxes are good taxes or not. And I think there is consensus. These are not good taxes. But the real question and that's something Ireland, I think, needs to understand. You're very good at understanding DSTs are bad. But what you need to understand is what's the alternative? The alternative is the global solution. Great. But if the global solution doesn't come, what do you do? I mean, what's the signal of Europe to the rest of the world? We can see massive activities deployed on our territories. The rules, everybody agrees, should be changed because there should be a new nexus and there should be new profit allocation rules, but nothing changes. So there is something wrong. There is something broken. How do you fix it? And in the fixing of it, you need to have a conversation between Europe and other countries, including the US or China, or emerging economies. So I think that's the real issue. Sorry, the second question from Indonesia, if you don't know. Should countries have the right not to tax digital companies if they choose to? I'm not sure I understand the question. I'm not sure what it means not to tax. It means that you exempt companies. So the time being, you don't tax because you cannot tax companies because of the taxing rights you get from treaties or you don't get. You don't get the right to tax a company which has no permanent establishment on your territory. So you may be happy with the current situation. In that case, you wait. But if rules change, they will change globally, and it would be quite surprising that you would refuse to tax when you have a jurisdiction to tax. Now, if you have a jurisdiction to tax, you could exempt the tech companies, but I think this would be destructive. That would not be fair competition. You can always do tax incentives, but frankly speaking, not sure it's the right sector to provide tax incentives should you have the right to tax. Finally, you're absolutely allowed not to introduce a DST if there is no global solution. My colleague, Dara Moriarty, wonders if the recent appointment of an Irish person to the head of the Eurogroup and another Irish person to the financial services job at the European Commission, whether those appointments could impact the European position, the EU position in the talks. I work at the OECD, not at the European Union, so I'm not the best place to respond to that question. But I would just like to congratulate both of them, and in particular Pascal Donner, who's done the fantastic job as finance minister and who's regularly in contact with the OECD, with my secretary general, with myself. He follows all that very closely. Now, what will be the impact of him being the chair of the Eurogroup on all this? I don't know. This is high politics and there shouldn't be an immediate impact on that, because the link is not obvious. Okay, so Ray Leiden, who's an economist at the central bank here, compliments you on your presentation. He asks this question, can I get clarity on the timings of the public consultations of the blueprints? He says, as I understand it, it's P2, the minimum tax this year, but after October. And P1 depends on the US administration, but it is likely sometime in early 2021. I think we will probably go for public consultation on both pillars. The level of questions on each pillar may vary, the targets or the focus of the questions may vary from one pillar to another, but we will go for both mid-October, probably asking for comments by December before Christmas. And Marc Malti, I'm not sure his affiliation, he didn't mention it. Here's his question. An OECD draft leaked in recent days suggests that OECD members will be asked to agree to exempt the United States guilty GILTI regulations from pillar two. Does this development suggest a clear choice between a US veto ending the process and the US continuing along with the process, as long as it doesn't affect American companies? It is true that for pillar two, the question of the coexistence between pillar one and pillar two has been raised by the US and by the US business and by many countries. The US initiated a global minimum tax with GILTI. And I think everybody knows and would recognize that expecting that Congress would change GILTI to align with an OECD global minimum tax would not be that realistic immediately. Finally, when you look at GILTI, the rate may look low with 10%, with an increase of to 16%. I never know when. I think it's 2025-26. But GILTI is pretty robust. And actually it's probably more robust than it intended to be because the expense allocation rule is such as companies which have an effective tax rate on average significantly above 10% are still submitted to GILTI payments. So the US, I think, legitimately raised the question of, well, if you guys do income inclusion rules, try to do them well, avoid the mistakes we may have made. And that impacted the design of the income inclusion rule. But they also said, well, the profits, which will be subject to GILTI, should they be exposed to under tax payment rules when they go to the US? And I think the answer is, well, that's a very good question. Let's look at it. And indeed, the US support for pillar two, which exists, which has its own logic, in particular, leveling the playing field, I think would logically be subjected to, we have a regime which is equivalent to what you want to do, subject to the final parameters to be agreed upon in the rate of the global tax, the global rule. But if it is the case, then I would expect the US to ask for being considered as deemed to be deemed compliant, so that there would be no under tax payment rule. I was careful not to use the word grandfather, because you may not know, and I didn't until yesterday, but I was informed, I checked, and it's true that grandfather actually has a pretty nasty history coming back from slavery. It was a way to deprive black people in the southern states of the US of their right to vote because of a grandfathering. If their grandfathers were not free citizens, then the grandkids couldn't vote. So we try to avoid using grandfathering, even though we all know that it has a special meaning, so that's why I use deemed compliant or coexisting, but that's the idea. Okay, a couple of other ones. How have the multinationals, the companies themselves, interacted with the process? Have they been involved at all? Has it been collaborative? And also, how have non-OECD countries, particularly China, worked in the process? How has that, as an OECD employee, how has it been to deal with non-OECD countries as part of this process? Has it been more complicated, et cetera? Well, it's interesting you asked the question, because for me the question doesn't even raise, because we have built an inclusive framework. These are not words. These are institutions. These are realities. I don't have 37 members. I have 137 members on an equal footing. China is a member. Ireland is a member. You're the same, equal footing. And by the way, I'm a French citizen, France being a member of the OECD, but I can recruit people from all IF members. And I have, I don't know, 15 nationalities in my team and so, so including Chinese citizens. So it's really global. So you need to have that in mind. As regards the business community, we never develop rules. We're very Anglo-Saxons for that. We never develop rules without input from the business community. We had a few public consultations. The calendar, the confinement probably didn't allow us to do as many as we would have liked. But we have contact groups. We have regular exchanges with businesses, the U.S. business community, of course, through USCIP, through the business round table, through many other organizations, but also businesses all over the world, in Europe in particular and in Europe in each and every country. So that's something which is so natural, you know, working with non-OECD countries, because for me they are like OECD countries, or working with business, because what we do is intertwine with business practice. And I would add, working with a civil society, which is very often very critical, but the more critical they are, not the more we engage, but however critical they are, we engage with them and we need to have their input. So pretty inclusive process, I would think. Okay, we just one minute to go, one more. David Cron, who is the co-chair of our economics group here at IIEA, asks, basically, does do the proposals benefit bigger countries at the expense of smaller countries? That's one point of view, which I think is not unfair, but you need to put that in perspective. What happens if there is no multilateral solution? The ones which will pay the higher price will be the small countries. The trade war or a tax war will make Ireland suffer relatively more than all the others. So at first sight, you may say, oh, a solution, again, it's the big countries trying to get together. But in reality, if they don't get together, if they don't reach an agreement, the small countries will suffer. And that's what our impact assessment, which again will be published on the 12th of October, I think shows pretty clearly that a global solution is not adverse to investment, is not adverse to growth. On the contrary, absent a global solution, you would have a negative impact on growth. And we know that countries like Ireland, investment helps like Ireland, and you're probably one of the most performing in that sense, would suffer more. So whether it's driven by large countries or not, I think it's the interest of all countries to have a solution. And that's why I said we work very closely with Ireland, and I would like to thank them for the very constructive input in the work. Ireland, since we launched BEPS, Michael Nunnan, now Pascal Donahue, have well understood that the solution is multilateral, or then it's chaos, which is no good for yourself. Pascal, thank you so much for joining us. I think we got a huge amount of information brought. We all came up to speed on many of the issues there, and thank you for joining us. And good luck with the talks and negotiations over the coming months. Thanks so much. Good afternoon.