09/02/21

INTERNATIONAL TAX: EU, UK envoys see better chance for global tax progress under Biden.

As published on reuters.com, Monday 8 February, 2021.

WASHINGTON (Reuters) - The British and EU ambassadors to Washington said on Monday they were encouraged by signs the Biden administration will re-engage in talks on reforming global tax rules for digital companies after discussions stalled under former President Donald Trump.

European Union Ambassador Stavros Lambrinidis told a trade conference he felt “great optimism” that Treasury Secretary Janet Yellen had shown a willingness to return to talks led by the Organization for Economic Cooperation and Development, adding it was “obvious that digital companies have to pay more tax. It’s just the fair ... thing to do.”

Britain’s ambassador to the United States, Karen Pierce, said her country had imposed a unilateral digital services tax in theory, but was not collecting it “precisely to encourage the administration to come and negotiate with us and others.”

Yellen, in her Senate confirmation testimony and discussions with several counterparts, signaled openness to moving forward on an international agreement on taxing the digital economy.

Nearly 140 countries are currently negotiating the first update in a generation to the rules for taxing cross-border commerce, to account for the emergence of big digital companies like Alphabet Inc’s Google, Apple Inc and Facebook Inc.

The talks stalled under the Trump administration after Yellen’s predecessor suspended U.S. involvement, but OECD ministers expressed hope last month that an agreement was within their grasp this year. They hope to reach a deal by mid-2021.

“This is another issue that we would like very much to resolve,” Pierce told an online conference hosted by the Washington International Trade Association.

“For the UK, we are very ready to negotiate this in the OECD,” she said. “The previous American administration were less willing to come to the OECD to negotiate. We’re talking to the Biden administration in the hope that we’ll be able to do this across the OECD.”