It’s (almost) done. In Brussels and Paris, we have already mourned the great digital tax project, on the menu of the summit of the “last chance”, the Ecofin of 4
December, bringing together the Union’s finance ministers. In June, Angela Merkel and Emmanuel Macron had promised “progress on the taxation of
digital ”before the launch of the European Women campaign. “It may be a little short to conclude before the end of the year”, admits Pierre Moscovici, the Tax Commissioner. Less than nine months to agree to 27 on such a structuring tax subject, it is a challenge “. Launched with great fanfare in September 2017 by Bruno Le Maire, the Minister of the Economy, this tax targets the tech giants, accused of massively transferring their profits to tax havens. If Europe demonstrates, as is likely, its inability to implement it, there is no doubt that the populist parties will take full advantage of it. Exclusive maintenance
Challenges: The Ecofin of the last chance will discuss, on December 4, your directive aiming to tax the digital giants. Do you still have a hope of success?
Pierre Moscovici, European Commissioner for Taxation: The game is not over and I am not giving up. But I am also lucid: it may be a bit short to conclude before the end of the year. The deadlines were very tight. This directive to tax the turnover of digital companies was proposed in March. Less than nine months to come to an agreement at 27 on such a structuring tax subject, it is a challenge and it has never happened in Europe, on any text. However, in the discussion, the awareness of the need for fair taxation of digital technology has progressed a lot. We left with an extremely weak base of support. Today, this support is largely in the majority within Ecofin. The problem is, you need unanimity.
Why is the probability of an agreement so low?
Support for our directive is conditional on an agreement between France and Germany, which has not yet clearly materialized. The German position is difficult to read, between a stated desire to get there while launching a call to wait for the end of the discussions on digital taxation at the OECD, which will be much longer. Germany has never been really enthusiastic. If there is no Franco-German agreement, the risk of failure is clear.
What explains the hesitation of Germany on this tax on GAFA?
It is linked in particular to the trade war launched by Donald Trump. Germany, especially the automotive sector, fears retaliatory measures because the digital giants are largely American. But precisely, we should not call our directive “GAFA tax”. It is awkwardness and inaccuracy. This tax would affect all companies with more than 750 million euros in turnover, including 50 million in the European Union, or 180 companies. It is often presented as an anti-American tax. It’s wrong. Half of the companies concerned are said to be American but 30% European.