Friday, 21 January, 2022

Washington threatens to seize WTO over “discriminatory” Gafa taxes

The United States plans to seize the World Trade Organization (WTO) taxes in their eyes “discriminatory” that France and other European countries want to impose on internet giants like Facebook and Google, told Tuesday to Paris an American official. “Within our government, some are studying whether this discriminatory impact would give us the right (to challenge) under trade agreements and WTO treaties,” said Chip Harper, head of the Treasury and US delegate for international discussions on taxes.

“We believe that the whole theoretical basis of taxes on digital services is ill-conceived and that the result is extremely discriminatory against multinationals based in the United States,” Chip Harter told a few reporters, including AFP, on the eve of a two-day meeting in Paris at the Organization for Economic Co-operation and Development (OECD).

The OECD is spearheading negotiations to forge a new global deal on taxing tech and digital giants, who often report their income in low-tax countries, depriving other countries of billions of dollars of income. But this overhaul is expected no earlier than next year, pushing France, the United Kingdom, Spain, Austria and Italy to adopt their own version of a “digital services tax” as of this date. year, known as Gafa tax (acronym for Google, Amazon, Facebook and Apple).

France “is a free and sovereign state which decides its taxation and which decides it freely and sovereignly”, declared Tuesday the French Minister of Finance, Bruno Le Maire, reacting to the American threats on the Gafa tax. Asked about the American threats to seize the WTO against the Gafa taxes, Mr. Le Maire affirmed in Brussels that “this absolutely does not call into question the bill which will be studied from April 4 in the National Assembly” .

Failure within the 28

The 28 EU countries also formally suspended the project for a European tax on digital giants on Tuesday due to opposition from four of them. The 28 finance ministers, meeting in Brussels, passed the buck to the OECD, where discussions continue to reach an agreement on an international tax on digital giants by 2020.

“In the event that by the end of 2020, it appears that the agreement at the level of the OECD takes more time, the Council – that is to say the 28 ministers of the EU – could, if necessary, return to the discussion on a European approach “, said Romanian Finance Minister Eugen Orlando Teodorovici after a meeting of the 28.

As expected, Ireland, Sweden, Denmark and Finland on Tuesday rejected this initiative for European legislation, which led to the project being blocked because in tax matters, unanimity is necessary within the Union to achieve a deal. “I am sorry that we could not come to an agreement today. I agree with Bruno (Le Maire, French Minister of Finance), this is a missed opportunity,” said the European Commissioner for Economic Affairs , Pierre Moscovici, at the end of the meeting of 28 ministers.

This failure within the 28 was expected and had pushed France to present on March 6 its own tax bill on digital giants. However, the European project is not completely dead, as Mr Moscovici also underlined: “In 2020, if we have not managed to find an international agreement, we must continue to move forward. The European Commission has failed. no intention of taking his project off the table, this is not the end, he is not dead “.

(With AFP)