In the aftermath of the green light from the G20 on the taxation of multinationals, Treasury Secretary Janet Yellen called on the European Union this Sunday to reconsider its digital tax project, recalling that this kind of tax introduced by several countries Europeans is considered “discriminatory against American companies”.
Concluded on July 1 under the aegis of the OECD and approved on Saturday by the G20, the agreement on the taxation of multinationals “invites countries to agree to dismantle existing digital taxes that the United States considers discriminatory and to s ‘refrain from instituting similar measures in the future,’ she said.
“Discriminatory” taxes
“It is therefore up to the European Commission and the members of the European Union to decide on the way forward,” she told the press on the sidelines of the G20 in Venice. “These countries have agreed to avoid putting in place in the future and dismantling taxes that discriminate against American businesses,” she said. Janet Yellen is due to travel to Brussels on Monday to attend the meeting of euro area finance ministers, where this subject will be discussed.
The Europeans want to take advantage of this Eurogroup meeting to “reassure” the United States about the digital tax project that the European Union wants to put in place in order to finance the EU’s recovery plan, the EU said on Tuesday. French Minister of the Economy, Bruno Le Maire. “We will have the opportunity to discuss this subject with her, to reassure her, to take into account the concerns of the Americans and provide the necessary details,” said the minister about the meetings planned with Janet Yellen.
“There is nothing directed against the Americans”
To finance the 750 billion euros European recovery plan, the Europeans have planned to put in place several new resources, including this digital tax. Washington takes a dim view of this project, believing that it will discriminate against American giants like Amazon, Google and Facebook and that it risks derailing the current negotiations on the reform of the taxation of multinationals.
At the end of June, the United States asked several European countries to delay the digital tax project as part of a discreet diplomatic approach. This European project could “completely derail” the current international negotiations on tax reform, Washington warned. “There is nothing directed against the Americans and I hope that we can remove American concerns on this”, assured Bruno Le Maire.
Three European countries unfavorable to the agreement
Like Spain and Italy, France has introduced a digital tax, but is committed to removing it once the agreement on the taxation of multinationals is implemented. In Brussels, Janet Yellen also intends to “use this opportunity to try to explain why we think that the few EU countries that have not joined the agreement, why we think it is in the interest of the world and in their interest to join this agreement ”.
Three EU countries, including Ireland, which is home to the European headquarters of many American companies thanks to its low tax rates, have not adhered to the OECD agreement signed by 132 nations. “In some cases, there are very specific technical problems that can be addressed, and where possible I know that we will all work in this direction in the coming months to bring these countries on board” , promised Janet Yellen.