Thursday, 20 January, 2022

Digital tax: France is now relying on the OECD to find an international agreement

French Finance Minister Bruno Le Maire on Thursday, February 28, renounced a European taxation of digital giants and is now counting on the OECD to find an international agreement, after having received commitments from the United States.

“There will be no agreement (…) on the draft European directive” to tax the digital giants on their turnover at the next Eurogroup meeting on March 12, acknowledged Mr. The Mayor on Public Senate, implicitly renouncing to seek to convince more lengthy Ireland, Sweden and Denmark, the countries which are the most opposed to it.

The minister, who should present to the Council of Ministers next week his plan to tax the turnover in France of the so-called GAFA (acronym designating the digital giants Google, Amazon, Facebook and Apple), has suddenly changed. objective in Brussels and will now strive to find a consensus with its European counterparts to negotiate a global agreement within the Organization for Economic Co-operation and Development (OECD).

“We can find a new agreement so that there is a common European position at the OECD and, with the support of the United States, we can have a digital tax proposed at the international level at the OECD by end of the year 2019 “, he explained the day after a meeting in Bercy with the US Secretary of the Treasury Steven Mnuchin.

“Things are moving”

“We hope to be able to solve this problem together this year”, declared the American official during a press conference alongside Mr. Le Maire, thus publicly confirming the change in attitude of Washington which for several years blocked the search for ‘an agreement within the OECD on digital taxation.

Mr. Mnuchin has certainly reiterated his opposition to the French plan to unilaterally tax the digital giants on their turnover, but he nevertheless “welcomed the French intention to repeal it if a global agreement was found within of the OECD “. “This is excellent news”, reacted Mr. Le Maire on Public Senate. “Things are moving and that’s good,” he added, recalling that Ireland has also declared itself in favor of seeking an agreement within the OECD.

“At the beginning everyone laughed at us” when France “put the subject on the table in the name of tax fairness, justice and efficiency”, recalled the minister, now convinced that a agreement is possible by the end of the year at the OECD.

The meeting between Mr. Le Maire and Mr. Mnuchin was clearly fruitful, the American official having unequivocally supported the proposal of the French minister to establish a minimum and international tax on companies, which he made the priority of his. this year presidency of the G7 Finances.

“Working multilaterally”

“We absolutely support this minimum tax,” assured the Secretary of the Treasury. “With the support of the United States, the pressure will be even stronger on the countries practicing low rates to attract the seats of multinationals”, welcomed the entourage of the Minister.

At the Davos Economic Forum, OECD Secretary General Angel Gurria was optimistic about considering a pre-agreement on the taxation of digital giants by the end of the year, which could thus enter in force from 2020. In Davos, Google vice-president Ruth Porat also provided support for negotiations within the OECD.

In the process, at the end of January, 127 countries had agreed to “continue to work multilaterally to find a long-term solution based on consensus by 2020”.

Faced with the difficulties of finding an agreement within the OECD and even the European Union, countries such as France, the United Kingdom or Spain have announced their intention to unilaterally tax GAFAs.

(With AFP)