11/09/20

INTERNATIONAL TAX: France calls on EU to adopt digital tax in 2021 if OECD talks fail.

As published on cityam.com, Friday 11 September, 2020.

France has called on the European Union to implement a digital tax by the first quarter of 2021 if an agreement cannot be reached within the Organisation for Economic Co-operation and Development (OECD) framework.

Speaking at a Eurogroup meeting of eurozone finance ministers in Berlin this morning, French finance minister Bruno Le Maire reiterated the need for an international tax system.

“You know how important it is for us to have a fair and efficient international taxation system as soon as possible,” he said.

“If you look at the consequences of the economic crisis, the only winners are the digital giants.

“I think this is a new reason to accelerate the work we are doing within the OECD to have a fair digital taxation.

“I want to make the things very clear: if it proves to be impossible to get a consensus by the end if this year at the OECD level… we should have, by the beginning of next year, 2021, a European solution for digital taxation.”

Earlier this week, Le Maire said he was concerned the US would block an international agreement.

He said the Trump administration keeps changing position on what the basis of the digital tax should be and insists on a voluntary element that other countries do not find acceptable.

“We have significant disagreements that I don’t expect to be resolved by the end of the year,” Le Maire said on Wednesday.

“If the US obstruction is confirmed by the end of the year, we are counting on the European Union to make a formal proposal on digital tax in the first quarter of 2021.”

It is the not the first time words between France and the US have been exchanged regarding the the digital tax, which has fuelled transatlantic trade tensions.

France imposed a national digital tax earlier this year, which Washington said unfairly discriminates against American firms, before then announcing its own 25 per cent tariffs on French goods in July.

The implementation of those levies was delayed for 180 days as France also suspended its digital tax pending the negotiations at the OECD.