EU mulls digital tax under pressure from France
EU finance ministers were under pressure from France to impose a digital tax in Europe, with international talks involving the United States bogged down.
Nearly 140 countries are trying to negotiate new norms for taxing tech giants like Google or Facebook, which under current rules easily shift revenue to countries with lower tax rates.
French Finance Minister Bruno Le Maire doubts that discussions at the Organisation for Economic Co-operation and Development (OECD) will succeed and wants the EU to draw up its own.
“The only winners of the economic crisis are the digital giants,” Le Maire said at a meeting of EU finance ministers in Berlin.
If he said, an OECD agreement is impossible by the end of the year, “we should have by the beginning of next year, 2021, a European solution for digital taxation.”
This would follow a failed effort in 2018 to agree an EU tax, that was vetoed by Ireland and Nordic countries that are reluctant to give the bloc new powers over taxation.
Ireland is also the low tax hub in Europe for many of the big tech giants — including Facebook, Google, and Apple.
Under renewed pressure to lift the veto, Irish Finance Minister Paschal Donohoe said he would “carefully” look at any proposal for an EU digital tax put forward by the European Commission, the EU’s executive arm.
“I accept that the way in which the taxation of very large companies, in particular digital companies, does need to change,” said Donohoe, who is also head of the Eurogroup of eurozone finance ministers.
Already France, Britain, Spain, Italy, and others have imposed taxes on the largest digital companies but officials in Washington say this amounts to discrimination against US firms.
The US continues to oppose ideas put forward at the OECD, but German Finance Minister Olaf Scholz has he was confident an international blueprint could be agreed later this year.
Germany has also been reticent about an EU digital tax and has asked to first try to find an international solution within the OECD.