The glass is only half full. Meeting Thursday and Friday under the aegis of the Organization for Economic Co-operation and Development (OECD), the 137 countries negotiating a reform of the digital tax system for large companies could only note the absence of a final agreement. However, they adopted a report which defines the overall framework of this reform. It will be submitted next Wednesday to the G20 finance ministers. Everything is ready. Only a few details are missing, but above all a political agreement to implement it.
The frame is ready
On Friday, the German Minister of Finance, Olaf Scholz, however indicated that these 137 states have agreed on proposals to reform the taxation of large companies. Before adding, in his press release, “this is a positive signal and I am sure that by the summer of next year we will be able to reach a final agreement on this reform plan” .
In detail, on the first pillar of the reform which concerns the new distribution of rights to tax the digital activities of multinationals, the general framework has been established. There are still a few outstanding questions. Starting with the main one, the United States agreement. However, the latter suspended their participation in the negotiations until the presidential election of November 3. On the second pillar relating to the establishment of a minimum corporate profit tax rate, “no threshold has been set,” Bercy said. Here again, only the principle is adopted.
Paris will levy the Gafa tax
In view of the observation of the German Minister of Finance, it appears that no final agreement will be able to see the light of day before the end of the year, as announced however, on several occasions, by the Secretary General of the OECD, Angel Gurria. The end of the first half of 2021 would be more likely.
This raises the question of French taxation on the turnover of Gafa (Google, Amazon, Facebook, Apple). Following the agreement reached between the French Minister of Finance, Bruno Le Maire, and his American counterpart, Steven Mnuchin, at the start of the year in Davos , France suspended the payment of the deposit due in the spring and in the fall pending an international tax solution. The United States, for its part, had undertaken not to tax French products imported in retaliation.
At Bercy, it is confirmed that a deposit on the 2020 tax will be taken by the end of the year and that the balance will have to be paid in early 2021. This leaves the risk of an immediate response from the States. – United , Donald Trump, even in case of defeat, being in the White House until January 20. To mitigate the risk of retaliation, Paris would like to speed up discussions on a digital tax at European level from January or February. Except that at this stage, Berlin would oppose it and would prefer to wait and see what the United States will do.