The EU should push ahead with its own digital taxation in the first quarter of 2021 if wider efforts to find an international solution don’t bring a breakthrough this season, the French finance minister has said.
Almost 140 countries are currently negotiating the first major rewrite of global taxation rules in a production to account for the growth of big electronic businesses.
Having a blueprint for a deal due in the Organisation for Economic Cooperation and Development (OECD) next month, the aim of reaching an arrangement by a year-end deadline is appearing harder.
Talking to reporters ahead of a meeting of European finance ministers in Berlin, France’s Bruno Le Maire explained he wanted to get a just and efficient global taxation system whenever possible and ideally within the OECD framework.
“If you look at the consequences of the economic crisis, the only winners are the digital giants,” Le Maire said.
“I want to make the things very clear: if it proves to be impossible to get a consensus by the end if this year at the OECD level … we should have, by the beginning of next year, 2021, a European solution for digital taxation.”
Le Maire has accused the United States of trying to undermine international talks to update cross-border taxation to the electronic era.
German Finance Minister Olaf Scholz, who’s hosting the Berlin assembly as his country now holds the presidency of their 27-member bloc, said EU finance ministers would examine the state of play and the way to move on the matter.
“And we will work to make it feasible that a global consensus of this question can be reached,” Scholz said, adding that such a deal could be a big success not just for Germany’s EU presidency, but also for the work in the OECD level.
An electronic tax is among the proposals to provide the EU its own revenues as a means to pay back jointly issued debt during the coronavirus pandemic.
The bloc decided in July to jointly borrow 750 billion euros available on the sector and spend it to kick start the market, turned right into a deep recession from the COVID-19 pandemic.
“The Ecofin will have to solve a lot of problems that we are facing due to the COVID-19 crisis and so it’s a very good thing that after months, when we met in video conferences and other ways of communication, we are present here and able to speak together,” Scholz said.
“After we decided to take very big debt as European Union to tackle this crisis together, to work against the crisis and to work on the recovery in Europe, it is necessary that we are also deciding the question how to pay this debt back,” Scholz said.
“And this means that we need to have a decision on European own resources.”
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Michael Nienaber and Benoit Van Overstraeten. Additional reporting by Leigh Thomas in Berlin and Jan Strupczewski in Brussels. Editing by Kevin Liffey, William Maclean.
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