Negotiations at the OECD for a tax on digital giants are deadlocked due to opposition from several countries, including the United States, Saudi Arabia and India, the French Minister of Economy Bruno Le Maire ahead of a G20 ministerial meeting this week in India.
“Today things are blocked, in particular by the United States, Saudi Arabia and India. We will plead for an unblocking of the situation” but “the chances of success are slim”, declared the minister during a press briefing, pleading for a European solution. “I remind you that we have always indicated that if the G20 and OECD countries were not able to agree on a practical implementation of digital taxation, we would plead for its European implementation. I think we are there,” added Bruno Le Maire.
The basics of fair competition
The Minister recalled that France had already implemented taxation of large digital companies at the national level which “brings us nearly 700 million euros per year”.
The taxation of digital giants is one of the two pillars, called pillar 1, of the agreement reached at the OECD to lay the foundations for fair competition at the global level in terms of corporate taxation. The other pillar, called pillar 2, is the one establishing a minimum tax of 15% on company profits.
On this aspect “things have progressed well” and this minimum taxation could be put in place “in the coming months”, according to Bruno Le Maire, even if the United States will continue to apply their own system called Gilti.