France slams ‘provocation’ as WE stop the digital tax talk


France and the US locked horns on Thursday (18 June) on the taxation of digital giants like Google and Facebook, after Washington said it was the breakdown of talks aimed at establishing a comprehensive framework to make companies pay more levies which they operate.“This letter is a provocation,” French Finance Minister, Bruno Le Maire, confirming the receipt of the announcement by the US Secretary of the Treasury, Steven Mnuchin.

France, great Britain, Italy and Spain had already sent a response expressing their desire to agree on a “fair digital tax at the level of the OECD, as quickly as possible,” The Mayor.

“We were at a distance of a few centimeters to an agreement on a fee for the digital giants, who are perhaps the only people in the world to have benefited greatly from the coronavirus,” he told France Inter.

In January, 137 countries have agreed to negotiate an agreement on how to tax tech multinational by the end of 2020, under the auspices of the Paris-based Organization for Economic Cooperation and Development.

Secretary-general of the OECD Angel Gurria warned that the new impasse could poison global trade relations at the worst possible time.

“In the absence of a multilateral solution, other countries take unilateral measures, and those who already have them can continue to keep them. This, in turn, leads to tax disputes and, inevitably, the worsening trade tensions,” he said in a press release.

“A trade war, especially at this point in time, where the world economy is experiencing a historic slowdown, would adversely affect the economy, employment and confidence even further.”

The european countries, in particular the so-called GAFA — Google, Apple, Facebook and Amazon — are unfairly exploit the tax rules that allow them to declare profits in low tax havens, depriving them of a fair share of the exercise of their payments.

In the meantime, France and great-Britain, Spain, Italy and others have imposed taxes on the biggest digital companies.

US officials have slammed the move as discriminatory against American companies, and say that all new levies should come only in the wider context of the review of international tax rules.

Paolo Gentiloni, the EU commissioner for economic affairs, said Thursday that he hoped that Washington’s decision to stop the negotiations are not permanent.

“I very much regret that the US move to put the brakes on the international discussions on the taxation of the digital economy,” it said in a statement.

“The Question of justice”

The Public pressure has been rising on governments to maintain high-technology companies more accountable for the services that have profoundly reshaped the societies and become an integral part of the economic growth.

Washington has threatened to retaliate against France, the tax on tariffs to the equivalent of $ 2.4 billion of French products, but he kept his distance after Paris said it would suspend any collection when the OECD speaks.

Us Trade Representative Robert Lighthizer does not exclude a multilateral agreement when he appeared before the House of Representatives on Wednesday.

“I think there’s clearly room for a negotiated settlement,” he said. “We need an international regime that not only focuses on certain aspects and certain industries, but where we are generally agreed how we’re going to tax people on an international scale.”

“The European Commission wants a comprehensive solution to bring the taxation of the company in the 21st century and we believe that the OECD on the two pillars of the approach is the right one,” Gentiloni said.

The “pillars”, in reference to the two major issues at stake in the discussions: how to tax businesses that governments do not have tax now, even if the company is operating in their country, and to ensure that each country gets to a good part of the multinational tax.

Gentiloni, said in the absence of an agreement of the EU-wide tax would be sought, but this is not a sure thing, given the fierce opposition of Ireland, which houses the headquarters of the EU, for several tech giants, including Facebook and Apple.

Taxation require unanimity among the 27 member states.

The Mayor has promised that, if no agreement is reached, France will go ahead with its own tax.

“Whatever happens, we will apply the tax on digital giants in 2020, it is a question of justice,” he said.

The head of the OECD’s tax policy centre, Pascal Saint-Amans, has said that the organization and member countries to continue to develop a viable project agreement before the end of the year.

“The united states is clearly signalling that they would prefer the elections,” he told AFP.

“This doesn’t stop other countries to work very actively to show that a solution is at hand and that the problem is that the united States,” Saint-Amans said.


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