I.

Words and expressions:

1) to scrap the current patchwork of national levies on tech giants
to create a comprehensive legal framework rather than the existing fragmented
system of different countries on the national tax obligation of large technology
companies
to eliminate the tax system that includes inconsistent levies imposed by different
governments on large technology companies
2) the big political elephant in the room
the significant and obvious issue that everyone in the negotiation of the OECD tax
deal is aware of but avoids discussing openly is whether the deal can be ratified by
the US Congress
3) “Pillar one”
a key component of the Two-Pillar Solution developed by the OECD to address the
tax challenges arising from the digitalization of the economy
a key/significant component of the global tax deal/tax solution discussed at the
OECD
4) decided against endorsing the political agreement
chose to withdraw from the OECD tax deal
chose not to approve the OECD tax deal
5) in the best interest of Sri Lanka and its people
for the advantage/benefit of Sri Lanka and its people
with the aim of benefiting Sri Lanka and its people
6) the possibility of the deal fracturing
the risk/likelihood/potential that the agreement may break down due to
disagreements
7) “critical mass” of signatories
“large” number of countries sign in provisional agreement
a required number of governments signing the agreement to make it be ratified

II. Comprehension questions:

1) The primary objective of the OECD tax deal is to set a major rule reform on tax.
Particularly, the organization aims to create a comprehensive legal framework rather
than the existing fragmented system of different countries on the national tax
obligation of large technology companies. Moreover, the deal also includes provision
to extend the ban on “digital services taxes” to 2025 rather than 2024.

2) By extending the ban on “digital services taxes” to 2025 rather than 2024, the
negotiators in the OECD attempt to prevent trade wars that could arise if each
country uses its way to recover more revenue from the world’s 100 largest
multinationals that are covered by the deal. Moreover, as the potential for the deal to
be ratified in some countries, such as the US, where the largest technology companies
are headquartered is uncertain, the extension can be a temporary solution to control
the situation.

3) Firstly, to fit the era of digitalization, the deal enables countries to tax a company
where sales are made instead of where they are physically present. Secondly, the deal
applies a new formula to calculate tax which is 25 percent of companies’ profits
above 10 percent margin. Thirdly, if countries sign the deal, they have to stop
applying digital service tax which is one of their own current methods to tax
multinationals.

4) The role of the IMF is to work with the Sri Lanka government to bring about
reforms that benefit Sri Lanka and its people the most. According to the
organization’s perspective, revenue mobilization is a key pillar of its programme with
Sri Lanka.

5) Unilateral measures are not the best solution, the optimal solution is definitely co-
operation . . . but the most realistic solution for developing countries now is to go with
unilateral measures

III. Reading for the gist

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IV. Summary
The OECD is attempting to rescue a groundbreaking tax deal after concerns that the
implementation of it hamper the effort to make multinationals pay more tax. The
primary objective of the deal includes creating a more unified system on the national
tax obligation of tech giants and extending the ban on “digital services taxes”. The
OECD tax deal requires multinationals to pay taxes on where sales are made and
applies a new formula to calculate tax which some emerging markets object to as they
argue that this formula favors developed countries and lowers their revenue take. As a
result, some developing countries neglect the ban on digital services taxes and pursue
their own measures. Therefore, even when negotiations on a provisional agreement
are finished, the potential for a mass sign and after that the ratification is unclear.

V. Translation
English Tiếng Việt