As published on news.bloombergtax.com/daily-tax-report, Thursday 11 June, 2020.
Global agreement on a version of the OECD’s plan to tax the digital economy should be possible by the end of this year, but the U.S. still has to be convinced, the French finance minister said Thursday.
“The last state that is blocking an agreement on digital taxation at the OECD is the United States,” said Bruno Le Maire, France’s Minister of Economy and Finance, speaking at a meeting of the French Senate’s finance committee.
“We won’t have a global, totally complete, agreement on digital taxation,” he added. “But we can at least have a minimal taxation on digital activities, really concentrated digital activities of the digital giants. That’s within reach.”
The Organization for Economic Cooperation and Development is trying to find global agreement on a plan that would reallocate more of multinationals’ profits to countries where they have users or consumers, and create a global minimum corporate tax and corresponding anti-abuse rules.
The project comes in response to the concerns of countries like France, which say tech giants aren’t paying enough tax where their users are. The U.S. has long said it opposes any OECD solution that would ring-fence the digital economy, applying a separate set of rules to tech companies.
The U.S. Treasury declined to comment.
France enacted a unilateral digital revenue tax in 2019, provoking a trade threat from the U.S. But tensions paused as both countries agreed to work toward a multilateral solution within the OECD, and France said it would suspend collection of its digital tax until the end of the year.
“Whatever happens, the digital giants will pay what they must pay in taxes in France for 2020, like any other company,” Le Maire said.