IGF 2021 – Day 0 – Pre-Event #122 Taxation of the digital economy - current challenges

The following are the outputs of the captioning taken during an IGF virtual intervention. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid, but should not be treated as an authoritative record.



>> WLODZIMIERZ SCHMIDT: Hello, everyone. Good morning, good afternoon, you hope that you can hear me. Okay, I can see nodding, some heads, thank you very much. Welcome, everyone, welcome to the next IGF panel, in this panel, we'll be discussing about the taxation of the digital economy with the current challenges of the solution that we have already been discussing for several years. Also, during IGF, we hosted similar panels, a year ago, two years ago, because as very well, many of you know, it is not a new topic, there are some new developments from the last several months. So it's definitely very interesting to hear about and hear opinion of some experts perhaps that some questions from the audience. 

First of all, let me introduce our today's panelists, Lukasz Kusmierz, chief expert from the Ministry of Finance from the Republic of Poland, Petra Wikstrom, Schibsted, partner, tax advisor, welcome, and thank you very much that you agreed to be here with us today. Before we start, before we go to patterns, questions, comments, let me just make a quick introduction, overview of the current situation, also for people who are listening to our panel today so that we are all more or less on the same page and all understand the subject similarly. 

As we very well know, after some years of intensive work and negotiations, to bring the international tax rules more into the 21st century, members visit the OECD group agreed to ‑‑ not long ago, just two months, 8 of October, to the statement of the two pillars solution to developing the tax challenges arising from the utilization of the economy. 137 countries and injuries ducks in total, represent exploring than 20 percent of global GDP have joined the two-pillar solution, establishing a new framework for international talks and detailed implementation plan that envisioning the implementation of the new rules by 2023, so we are talking about very near future, just the next two years. The deal will reallocate more than 125 billion of U.S. dollars of profits from around 100 of the world's largest and most profitable multi‑national enterprises to countries worldwide ensuring that these firms pay a fair share of tax wherever they operate and generate profits. 

So maybe just a few words about those two pillars, what those two are. Pillar one with all ensure a fairer distribution of the profits and taxing rights among countries with respect to the largest and most profitable enterprises and it will reallocate some taxing rights over multi‑national enterprises from their home countries to the markets where they have business activities and the ‑‑ earn their profits, regardless of whether firms have a physical presence there or not. So specifically, multi‑national enterprises with global sales about 20 billion Euro and profitability about 10 percent can be considered as the winners of the globalization will be covered by the new rules with 25 percent of their profit above the 10 percent threshold to be reallocated to market jurisdictions. And pillar two introduces a global minimum corporate tax rate set at 15 percent and new minimum tax rate will apply to companies with revenue above 750 million Euro and estimated to generate around 150 billion American dollars in additional global tax revenues. So this is the basic two pillars. 

I will not go into the dolls about how the European Union reacts to this, for example, because we will go to this, but later, perhaps, during our discussion, because we know that some injuries ducks and also some geographical areas, economical areas like the European Union, were working on their own solutions and those solutions were currently put on hold awaiting how this global solution from OECD will take place. So, first of all, I would like to ask our panelists today, how do you find this solution? Are you satisfied from different perspectives, perspective of the business, the government, are you satisfied with this two‑pillar approach or do you think this is something that we all ‑‑ let's say all the stakeholders were waiting for? Whoever wants to start, could be Petra, Lukasz. 

>> PETRA WIKSTROM: I hope you can hear me, I'm Petra Wikstrom, I'm from Schibsted. In the Nordic market where we operate classified marketplace and financial services and different comparison sites. We are also an anchor owner and actually the creator of a global company called Advanta which has classified marketplaces in 16 countries around the world. And Europe, for example, France Italy and Spain. For us, the digital taxation issue has been extremely important for different reasons. We have really been looking for a global solution. One of the reasons for that is, of course, that we see that there is sort of an unlevel playing field. There is not a fair system of taxation around the globe, especially taking into account the biggest competitors we at Schibsted have, which are the big, big tech companies on the digital market. 

So those are our competitors both when it comes to the advertising business, when it comes to different kind of comparison sites and of course when it comes to a lot of different issues around distributing media. But also when it comes to the National digital taxes that we have seen in some of the markets who are especially Advanta have operates, we have called for a global solution which is Harmonizing the system rather than having national solutions. We are very supportive of this OECD solution. But, of course, we still need to see how it will work in practice. And especially one would say this is a step in the right direction, of course we need to see how it will be implemented, what are the practical solutions going to be, first, this is very good news. 

>> AGNIESZKA WNUK: Another business perspective. I'm a tax advisor, I talk to different groups, different enter prizes, and for sure it will be a huge change. We have completely new idea, as regards price within pull Lar one, of course it will only concern really the biggest groups. Although there is, as I understand the plan to take the threshold with time. But the change is really huge. And also, the solution addressing pillar 2, the minimum income taxes some something enterprises will have to deal with. 

From my perspective, from my discussions with clients, it's good, it's good news that there is any, you know, progress, we know a little bit more than we used to no, because the discussions around the taxation and digital economy started many years ago, and there were different ideas, within the ‑‑ OECD level, so there was a lot of uncertainty. I have also some smaller groups, smaller enterprises, like Polish groups asking whether this new solution will also concern them, and so it's good we know a little bit more. As Petra said, it's very important to know how to prepare, 2023 may be not tomorrow, but still the change seems to require a lot of preparation. Also from technical perspective, so we are waiting for details on the solution, the drafts and then we will know how to prepare. 

>> WLODZIMIERZ SCHMIDT: Thank you, Agnieszka Wnuk. 

>> LUKASZ KUSMIERZ: I'm Lukasz Kusmierz, I coordinate efforts on pillar 1 and 2. From the Polish government perspective, it is the best form from the problems arising is the international forum and the best solution would appear right through. As to the latest statement and latest achievement, it is a great, unprecedented achievement, in a way, that it was very hard, very difficult to gather 100 and ‑‑ more than 130 jurisdictions under one banner to do the one exactly same thing and coordinate all the efforts and have a consensus. From a political and diplomatic perspective, it's a great success, unprecedented success, one time in a generation chance and I'm very proud that we did it, that the jurisdictions have stepped up and did it, and now it all depends on how we are going to implement it. It's completely under discussion. So from a political perspective, it's a start, a great start, public opinion says okay, it's a success and now all we have to do is implement it. But it's a completely different discussion, and big challenge in itself. 

>> WLODZIMIERZ SCHMIDT: Yeah, thank you very much. So, yeah let's go a little bit how to implement it and not how to implement it, but first of all, is it doable, is it implementable? Do you think those provisions which are there, for example the minimum 15 percent income tax, this is something all the countries, all the jurisdictions worldwide will accept? Currently there are still some jurisdictions and countries that are considered like tax paradises. So perhaps those multi‑national enterprises with all have their receipts there to avoid taxation or to pay a little bit lower taxes. Do you think we can really count on this solidarity, sort of, still the implementation phase and all the countries worldwide will be implementing this? 

>> PETRA WIKSTROM: From our point of view, we have already seen that the pressure that has built up to this solution has already led to some changes. So we see that the U.S., of course, has had a big discussion about taxing, especially big tech companies and have started to tax them. But in particular, we have also seen that Ireland has now said that they will actually raise their tax rate to 15 percent, which we heard in the summer that they were willing to do. So I guess that the international pressure, the political pressure is very important here. Of course, I think there is also a lot of pressure in order to make sure that this will actually work. 

Then the question is, of course, how will it work, because, of course, for us, there are different kind of tax authorities that need to sort of talk into account the reporting requirements, how will we know how much tax one company is paying to certain jurisdiction in order to then report to the other jurisdictions and so on. So we really have a lot of questions about this. From Schibsted's point of view, we are not one of those 100 countries, we are part of this solution, for us the main possibility has been to get a fairer tax system, where we also see met that he competitors we have in the digital market also pay tax, not only us that operate in the Nordic market or the European market that have always paid tax. 

>> WLODZIMIERZ SCHMIDT: Basically the next question that I would have here is how ‑‑ because Petra started this a little bit. This will not apply to you because you will not meet thresholds, there are other companies who are not necessarily such multi‑national corporations but operate just one, two or three markets because the digital economy provides those opportunities, and there are companies who are already meeting the threshold of potentially meeting it when it started mentioning something, and they for a little bit afraid they will be also subject to this taxation. And I remember that there were such worries in the past years so Agnieszka Wnuk, is it something those companies are still worried about or they basically ‑‑ the solution you think will be fair enough and they shouldn't worry. 

>> AGNIESZKA WNUK: Well, if you are talking about being covered by this tax, I think that the smaller companies should not be worrying, in particular, about the pull Lar 1 because it's really for the biggest. And as regards pillar 2, there is quite high threshold. So the ‑‑ you know, they with all ‑‑ they will need to deal with this. How it will in practice work for them, then we will know, because we have some ‑‑ only some general ideas. Here I would be curious, especially about the minimum tax, because you started the question about this minimum tax, global minimum tax, and there are some carveouts expected, the substance carveouts, but we do not really know too much about that. 

You know, it depends if there will be a real substance carveout. I think that the real impact on the companies conducting ‑‑ having operations in particular countries with even lower rights should not be that difficult. And I'm curious how it will work in Poland because we have, like, some tax reliefs R&D, some things like that might decrease the effective tax rate, and I'm curious whether this substance carveout would be helpful for these companies that benefit from the reliefs, tax reliefs which leads to the lower effective tax rate, and how it will work, if it will be, you know, easy to apply this carveout or not, whether it would be assessed by the taxpayer itself, because today we have the tax law, we have lots of provisions, in Polish tax law and international, for example in the European Union, we have other directives, the tax consequences depend on whether there is a business substance or not, and it's quite, you know, difficult in practice sometimes to assess whether this substance will be accepted, you know, Polish practice or not. I'm thinking how it will work for this pillar 2 solution, with all there be any kind of, you know, specific provision or maybe some guidelines on what you need to do to meet ‑‑ to apply this carveout. So maybe it's a question to ask. 

>> WLODZIMIERZ SCHMIDT: Sounded like a question Lukasz could answer, of course different jurisdictions and different countries may have a little bit different approach. I'm sure the Polish government will look into this and perhaps not ready policy for this but perhaps you have some first thoughts about how you think this should be approached. 

>> LUKASZ KUSMIERZ: Thank you. So yes, of course, and even more one of the biggest ‑‑ we are on the front line, substance carveout. Also a few other countries have really based on substance and investment, incentives, just like Poland. We are talking R&D, tax relief, tax relief and so on and so on, so it is one of the biggest ‑‑ biggest fan of substance carveout. We pushed really hard for it. It will ensure, and I can say that easily, it will ensure that being constructed right now. The modern rules and the European Union directive and Polish law itself will ensure a high level of substance based carveout in a way that it will describe very precise what kind of assets are being Cal clotted, will be calculated for the carveout, what the percentage will be, how the rules will be of the calculation. 

It all will be there. I don't know exactly what will be there, it will be with a high degree of certainty to ensure that he tax incentives can be used if they were designed to attract investment. This is the basics of Polish tax incentives; they are very heavily based on real economic substance. So with regard to the pull Lar 2, I think it's going to be okay, just a matter of how and when exactly it will be implemented and what we already know, there will be a directive plan for pillar 2, a first directive before the pillar 1, and it is coming really, really soon, a matter of weeks, not even months. 

>> AGNIESZKA WNUK: So am I to ask, is it going to be your directive to, you know, apply the pillar to solution within the Eu countries. 

>> LUKASZ KUSMIERZ: Yes, it was already publicly said by the commission it will pillar to direct. 

>> AGNIESZKA WNUK: As regards, if I might ask another ‑‑ as regards the carveouts, you mentioned there would be the buyers, do you think that it's possible to have intangibles. From our perspective and the digital economy, it's important to have also the intangibles treated as assets, because some previous phases on pillar 2 and the global minimum tax, only fixed assets were taken into account. So for our industry, the internet industry is not a good, you know. 

>> LUKASZ KUSMIERZ: I will try to answer this. The substance carveout will be limited only to only parts of fixed assets, not even to all fixed assets, the basics is the statement on the 8th of October. So it was a part of very, harsh and difficult discussion and negotiations, what will be the ‑‑ what will consist ‑‑ what it will consist of, that was a very difficult discussion. To be honest, it was one of the things that was most easy to agree that it should be based on fixed assets. What fixed assets is under discussion? There was an agreement it should be based on fixed assets because intangibles are easily transferable. 

As project itself is being called 2.0, so it's aimed to the profit shifting. In tangibles often maybe not always federally, but often associated with a boss erosion. So to start with fixed assets. It was a very difficult discussion what fixed assets, but it was a consensus from every stage it should be based on real economic substance like buildings and building, workers, employers, property and so on. 

>> WLODZIMIERZ SCHMIDT: That's interesting because we are talking about digital economy. This is like pretty normal that the market you generate your profits or revenue, and profits might be completely different from the ones you have fixed assets, your buildings, teams and so on. This is normally the case, actually. So I really wonder how we are going to handle all this and make it really fair, because if this is too complicated or becomes too complicated, I'm afraid this would make it easier for the multi‑national companies to really avoid paying the taxes because, you know, it will be easier to navigate. 

There's this saying when the water is not clean, it's basically easier for the fish to hide. So this could be the situation for the future. Hopefully not, because there is another thing that I wanted to discuss with you. It's basically the enforcement, because we are talking about a global solution, but, of course, Petra mentioned something about, you know, a system of good communication among all those countries involved and so on, so basically, you know, what are the current available, I understand none, but maybe I'm wrong, perhaps Lukasz knows better, enforcement tools and what should be the enforcement tools because if the ‑‑ many of the corporations, they don't do the proper reporting, basically we still do not know where they are generating the revenues and the profits. 

>> PETRA WIKSTROM: I think from a business perspective, I mean, of course it's very important to have transparency and predictability on this issue and what we have by calling for is to avoid double taxation. Of course, this is important when we are discussing new roles in digital tax and to the question of what is going to be taxed. Our taxing advertising income online, taxing transactions, what are we taxing. What we have for example seen in the national solutions that we have in certain European countries is that there has not been a possibility to deduct. 

So there will be a double taxation for companies already taxing and paying profit tax in their own countries and will have to pay a digital tax on top of that. So, again, I think this is important when we are looking at enforcement and also the reporting to understand for a company what is actually going to be taxed and how is that going to be Cal clotted based on what is already being paid. But, of course, this is not going to affect us in the first instance, but we are already ‑‑ Advanta is paying national digital tax in four or five countries in Europe, and there the question of double taxation has been a very important one. So transparency and predictability will be very important. 

>> WLODZIMIERZ SCHMIDT: Thank you very much, Petra. That's true, double taxation, that was of the worries of the companies in the last several years, especially the smaller companies we are discussing, also the multi‑nationals, they were afraid that in the end, the solution may be so strict, they will start paying double in some instances. I can see Agnieszka Wnuk unmuted herself. Maybe you want to comment on this as well. 

>> AGNIESZKA WNUK: I agree with Petra, there is this issue of digital services taxes which are, as I understand, to be ‑‑ two pillar solution is to be implemented. I think the reason why the countries within the EU or other countries decided to implement digital services taxes, one of the reasons is just because it's easier to enforce. It's not that difficult mechanism, just a percentage of the turnover, and as regards, pull Lar 1 solution, much more complicated. 

I understand the concerns that Petra mentioned about how to calculate it and how to comply with, because when we are discussing the enforceability, there are two aspects, first, how to make the companies are will pay, how to make them not to avoid and not to be able to avoid, but a significant aspect, from business perspective, is whether there will be the certainty how to Cal clot and where to pay and, you know, for now, we don't know about it too much, So for this new solution, from my perspective, for this new solution to be really effective, it needs to be clear, and when it is clear, it's ‑‑ on the one hand, it's more difficult to avoid. On the second hand, it's ‑‑ for those who really want to comply, it's also easier. 

>> WLODZIMIERZ SCHMIDT: Lukasz, do you have an opinion on this, from the Polish government perspective, are you looking at how to enforce this solution. 

>> LUKASZ KUSMIERZ: I mean, it's really interesting question. In a way, we are far away from enforcing because the statement from the 8th of October is just a gung, to be honest of real technical work. Now we have to go to the working parties, which is already happening, in OECD and start working on the convention which will take a few months, and it is a convention between jurisdictions, it will have to translate this convention after a fast certification process and transfer this convention into jurisdiction legislations. 

So it has to be done in a very ambitious timeline and from the beginning, from the statement that only says a few words on certain topics, have to go through our tough negotiation process, through entire convention, a lot of podges long, then have to translate this again, into that legislation of each country, and each country approach the same legislation differently. So it's really hard to say right now what is the final effect. We have an idea with pillar 1, the harmonization of the general purpose and idea how it should work. What the forest will look like, might differ from jurisdiction to jurisdiction. 

In my opinion, it's too early to say how this will work exactly, but this is one of the biggest challenges, to be honest of pillar 1 entirely, how do we implement it. How to build a capacity for tax administration. This is a problem that requires to build a lot of capacity and in administration. You have to hire new tax specialist and school them, make them to work with biggest companies in a new special departments, requires a lot of work on the tax administration side itself. The first thing is to simply implement it in such an ambitious timeline. 

It is very ambitious, all jurisdictions are already doing what they can to implement it, and already the working party on the OECD have started to work on it, but long way ahead of us, and it's simply, in my opinion, too early to say about enforcement or certain things that are going to be implemented in the solution, the final solution, the technical one in the legislation. 

>> AGNIESZKA WNUK: If I can add something, maybe a question. We have some ‑‑ already some experience with multi-lateral convention, yeah, because we have the project for other actions, and after like four or five years, we have about 90 or more ‑‑ 90 countries that enforce this. But it took them ‑‑ when you can find the list of countries and the year in which they implemented. So it normally took them like two or three years. So I'm wondering whether it's really possible to have this new tool, this MLI enforced in all the countries that signed the agreement in July, like in 2023, because every country has its own certification process and it takes time, we know, and maybe some countries may be less willing to implement it very fast. So probably the question about the enforceability and implementation is right because we don't know, it may take like a few years, it was with the previous MLI. 

>> WLODZIMIERZ SCHMIDT: It's an interesting discussion, thank you very much. The overall picture after this, I can see, on the one hand you are all very happy and very enthusiastic about the general idea and the solution and the fact that the OECD finally has come to this conclusion, this solution, so fantastic, yeah, but when we go more into the dolls and start discussing how this should be implemented and where and so on and what kind of different challenges it creates, including a very ambitious time line, it looks like all the potential challenges are ahead of us. 

So far, we are happy, but we are on a very, like, high level solution at the moment, and you when we are going more into the details, basically more into ‑‑ closer to the implementation phase, it appears it may not be so simple at all. It may be quite complex and complicated and take even longer than we really anticipated. So maybe from this picture, if I may ask you, what could you advise people who are working on this, on a more global scale whose idea it was to Harmonize it. I would say to legislators from the OECD, but even from zones like the European Union, for example, what could be our advice from, let's say, local governments, local businesses, you know, what they should do or shouldn't do, maybe you know we should be thinking about longer time line and not this up to two years, but maybe we should be more realistic and say, no, it will take longer, so maybe let's admit this, that we are not ‑‑ we really are not automobile to have it fully harmonized globally in two years and so on. Do you have any kind of ‑‑ that sort of, I don't know, thoughts or ideas or recommendations? 

>> PETRA WIKSTROM: I'm not the right person to answer how that should work in practice, but I of course hope very much that, you know, the different countries will sit together and look how they will implement this. What we see is that we are really quite much further than where we were some time ago, a year ago, having countries that want to implement this, we had a lot of countries saying they don't want to do it and now they have still agreed and also that we have countries that have their national DST, digital services taxes saying they will cancel them when this system is in place, which is extremely important. So I think just a signal effect of this has already had an impact I think on the businesses in order to sort of be reassured that we won't have a national solution in the future. 

These national solutions are really quite damaging, and I think there's been a lot of time and effort built into the National solutions as well. So one would, of course, hope one would put more time and effort at how we can work together in the OECD framework and, you know, and also the fact of having harmonization, so it's the same system everywhere rather than different systems in different countries, which is very, very harmful for business ‑‑ global business or even just European‑level business. 

>> WLODZIMIERZ SCHMIDT: What do you think when those country solutions should be canceled? Because the danger I can see here is that there will be double taxation because if the countries say, yes, we will cancel our country solution, but only providing the full harmonization is fully implemented worldwide, then this means that for some time, at least, there will be some kind of overlap and double taxation. Should that be like one of the first steps for the countries with local solutions that they should just cancel it, even if it is not fully harmonized or fully implemented in other countries. 

>> PETRA WIKSTROM: This point, I think it's extremely important to see what the European Union will do. As already mentioned, they have said, the commission has said already before Christmas, they would come with a proposal on how to see how we can Harmonize the implementation. We would also want to have a very strong signal from the commission saying that now it's time to cancel the National solutions because we are sort of going ‑‑ moving forward towards a global OECD solution so that the countries actually also will do it and perhaps that could be discussed at an EU level. The more we can do on an EU level as well to prepare for a global solution and the signals we get from the organization. That would be very important. 

>> WLODZIMIERZ SCHMIDT: Thank you very much. Lukasz, I know the Polish government was rather against local solutions, however at the same time because there was a time the Polish government used to work on local solutions as well, but only providing there would be no global solution. So currently I understand that you are still against the local solution and you would probably support this push for global and at least European solution still, but even from your perspective, when you look at yourself as the local government, who has to implement it now, what would be your wish, let's say, to the European commission of the OECD to make your life, perhaps, easier, how you would see this, bearing in mind all those potential challenges coming up? 

>> LUKASZ KUSMIERZ: Right now, to be honest, you will start with that, there is an interesting discussion internally, an appropriate was to implement the pillar 1, with directive. Because pillar 1 itself must be based on multi-lateral convention, it will not work if there will be no convention. Many people, Professors, there's a lot of discussion wondering if this is really necessary to Harmonize it on the European level, because it may not help. Just an open discussion, I don't have an answer right now, but the crucial thing here is the definition of not only jurisdictional dc's, but definition of critical mass. Pillar 1 will only go into force when there will be a critical mass reached, this critical mass, which will be defined in the multi-lateral convention has not been discussed, defined yet. 

So what is happening right now is the jurisdiction between themselves are discussing how to define it and when we will know what the critical mass means, then we will have a starting point for further discussion on the implementation, for example, we could have entire European Union joining the agreement, join the convention and some other jurisdictions from other regions of the world will be maybe not reluctant but won't be so happy to implement it in a really fast manner. So the critical mass won't be reached. That's why it's important to start slow with the convention itself, then we will see what will happen next because right now, starting ‑‑ we can assume we need a directive or executive fact from the commission or like this, it's simply again, maybe too early. 

In a way that certain definitions have not been stated right now, and we are still working on some very important details, but they are very important details. As to the unilateral measures themselves, the statement somehow says something about the ‑‑ how to revoke and when to revoke the digital service taxes in a way the jurisdiction already obliged not to introduce new taxes, that's the statement itself literally, it's helpful information, the existing ‑‑ the service taxes will be removed and revoked when the pillar 1 is in place. Already there has been some movement in this area, jurisdictions that have such taxes have contacted and communicated with the United States, make certain statements how it will be calculated when those additional service taxes are revoked. 

It gives a certain level of certainty what will happen next. It's all constructed in a way if, for example, the pillar 1 will not work, we hope it will work, then the additional set of taxes and unilateral measures will remain, this is how it is constructed. Pillar 1 comes into force, the digital service taxes are off. If not, the situation will look completely differently. 

>> WLODZIMIERZ SCHMIDT: Thank you very much, Lukasz, that explains a lot as well. We have still 15 minutes to go, however, the idea was the last quarter would be more for questions from the audience, but unfortunately, I can't see any questions from the audience. So far, at least. So maybe then we can either in a little bit earlier or take some questions. I can see some people, I think raising hands, but I'm not sure, I'm not sure how it's possible they ask us because we can only read those questions online ‑‑ there is a mic, okay, let's listen to the question. 

>> Audience: Do you hear me. I'm from Iran, and I have a very personal question. When we talk about taxation, we are now in an era of decentralized finance and game finance and, you know, there are a lot of like economic instrument in the entertainment sector that are called like ‑‑ a lot of similar issues. We get advancement of technologies that basically is against economic institutions. How should we address in future that the implementation of the taxation regime? Because, personally, I'm an advisor to the Iranian regulatory body, this is one of the most challenging situations that we have. So I would like to ask from the panelists, regarding this issue, thank you so much. 

>> WLODZIMIERZ SCHMIDT: Thank you very much for this question, it's very interesting indeed. Touches upon different area that we are discussing here today. You are right, that this is the future. So this is probably one of the next steps. So anyone from our experts feels like answering this question? Petra, Agnieszka Wnuk, Lukasz, any kind of thoughts about this. 

>> LUKASZ KUSMIERZ: I will try. I'm not saying the answer will be satisfactory, but I will try. As we talk about the statement and the recent discussions, the statement directly says that the regulated financial services are excluded. Which is very interesting in a way that it resembles the general discussion about the modern, the regulated classic services like banks are excluded from this new reform. But unregulated services, for example, innovative, option based financial institutions and on and on, they are not excluded. That means they are not excluded only because they are not regulated. If we look at the landscape of regulations coming, for example, in the European Union, which is right now preparing certain regulations to regulate blockchain, Bitcoin especially. Crypto currencies at all. When they will become regulated, equally as the classic. That will change how we perceive them and their position in the tax world in general. Right now, they are not excluded but they will be excluded when they will be regulated. 

>> Audience: Thank you so much. 

>> WLODZIMIERZ SCHMIDT: Thank you. Any more questions? 

>> Audience: Can you hear me. 


>> Audience: I'm an AI student. It touches my topic. There is a growing debate about the data collection processing tax. Should it be introduced and if yes, how it should be introduced for the companies. 

>> WLODZIMIERZ SCHMIDT: Again, the same question to our expert panelists, who feels like answering this question? The collection processing tax. 

>> PETRA WIKSTROM: It's a very interesting question, we have been thinking about it a bit as we are a very data driven company. We don't have a position on it yet, but of course we have to, again, I think probably come back to this issue of double taxation. We are very willing to pay more taxes, to pay our fair share to the society, but if we are going to introduce new taxes, we have to see what the impact will be on the taxes we already pay. That is probably the answer I could give at the moment. But I would agree we probably need to look at new ways of taxing, also to the sort of question we had earlier when the whole sort of market and the digital environment is developing so rapidly, and also, you know, the COVID has, of course, brought a situation where we may have employees in different countries than what we used to have. We are not sort of so geographically restricted as we have been before, so I think that there is definitely a merit in discussing these things, for us the main issue is to say that we don't pay additional amount of tax as we already think we pay the fair share. So it's avoiding double taxation would be the most important thing. 

>> Audience: Thank you very much. 

>> WLODZIMIERZ SCHMIDT: Does this answer the question? I hope yes. Okay, thank you. Are there some more questions? I guess not because I don't see anyone moving and also, I don't see any questions here online in the chat function. Okay. So maybe we have still ten minutes left. So any of our experts and panelists, because before we say thank you to everyone, do you have some maybe closing statements or something that we didn't discuss, we didn't ask about something that you consider important and should be mentioned during our today's discussions? 

>> PETRA WIKSTROM: I think we would probably just want to mention briefly the European digital levy, that of course you mentioned at the beginning that has not been set, has been put on hold. We, of course, as a digital company are interesting in seeing what that would mean and what we feel is an interesting notion from the commission saying because digital companies, so to say, have gained from the COVID pandemic crisis, digital companies would need to pay a new levy to the commission to pay for the recovery of the crisis. This is something we find quite worrying, that we are starting to look at taxing certain sectors because they may or may not be gaining from some situation in the sort of society. We don't really see a similar issues anywhere else and we also think that in the future, of course, we are now looking at the digital tax in particular, but why would companies be taxed differently based on their digital or not digital incomes, so we think it's very good that the Commission has put this on hold, but at the same time, we would question the rationale behind taxing digital companies because of their impact or not on the COVID pandemic. 

>> WLODZIMIERZ SCHMIDT: Thank you very much, Petra, I can really relate to this because we had similar situations when the pandemic started. In Poland when the Polish government implemented so called VOD tax, basically it is not a tax yet, but it's a special fund created and this fund basically is being funded by VOD services, and it was the main discussion was exactly that the companies and the sort of businesses that benefited from the pandemic, because their revenues basically started growing, they should have in the movie production and supporting other industries who were offline like cinemas. So this is something that is also very worrying and basically very disturbing direction, I would say and very dangerous direction, which already is happening from time to time on the national level, but even more worrying when it happens on the level like European Union. Agnieszka Wnuk, I'm sorry, I think I interrupted you because I saw you were unmuting yourself. 

>> AGNIESZKA WNUK: Thank you. I just wanted to say you mentioned, you know, that the reasons that the business reasons that justify the tax on the EU level should not be implemented. For me, it's that the EU digital levy that was discussed earlier this year, it was something quite ‑‑ it could be something quite similar to DSD. So it could be some ‑‑ it's inconsistent, would be inconsistent with the OECD idea and work, so I also feel that it's a good movement that the works are not continued on this. 

>> WLODZIMIERZ SCHMIDT: Thank you very much. Agnieszka. 

>> LUKASZ KUSMIERZ: I want to say, great momentum and great atmosphere. Really difference ‑‑ completely different from the first, when to implement, so I think we can have high hopes for this ambitious time. I don't know if it will happen, if we will be able to uphold the timeline, but there is a great atmosphere, great momentum, great willingness, which is something new in international taxation, a great willingness in all jurisdictions to do that. I have high hopes it will work in this ambitious timeline. 

>> WLODZIMIERZ SCHMIDT: Thank you very much. I think we are all crossing our fingers. That this will finally happen and thank you very much. Thank you our panelists, Lukasz Kusmierz from the Republic of Poland and Petra Wikstrom and Agnieszka Wnuk. Thank you to all the participants offline and online, and the questions, you think those are interesting that I think we should include them in the future panel discussions and maybe even think if this could be a stand‑alone topic for IGF 2022. They are so interesting, especially the one about unregulated finance economy and blockchain based crime to currency trading and so ‑‑ crypto currency, online gaming, this is a topic which is on its own huge and probably requires an additional and completely independent discussion. So thank you very much. Once again, and enjoy the rest of the IGF today and during the whole week, and hope to see you soon again, thank you very much and goodbye.