US backs EU's call for a global digital tax deal
The French government warns that failure to reach a single, international digital tax system would make business hard for firms including Apple -- and the US Treasury agrees.
Apple Store Champs-Elysees, France.
Following the European Union's unveiling of its strategy for digital taxation, world financial leaders are meeting to discuss how to create and implement a global system. At the same time, US Treasury Secretary Steven Mnuchin has said that if there is no one overall deal, Washington will threaten tariffs to prevent the creation of different tax systems in different countries.
"We've been very consistent in saying we think the digital services tax is discriminatory in nature against digital companies, and specifically a handful of U.S. companies," he told reporters, according to Reuters. "The president was clear that we were proceeding with ... reciprocal tariffs."
At the two-day G20 economic conference in Riyadh, Saudi Arabia, French Finance Minister Bruno Le Maire emphasized the importance of global accord. He said that the conference was on track to debate the issues for the rest of the year.
"For the first time there is wide consensus among the G20 members on the necessity of having a new international taxation system," Le Maire said.
"We have to address the issue of digital companies making profits in many countries without any physical presence, which means without paying the due level of taxes," he said. "And we also have to address the key question of minimum taxation and the risk of having a race to the bottom on taxation."
"There is a consensus to build a solution by the end of 2020," Le Maire continued. "Let's be clear -- either we have at the end of 2020 an international solution... clearly in the interest of all countries and digital companies, or there is no solution and ... then it will be up the national taxes to enter into force."
While the discussions have been planned to continue throughout 2020, the Organization for Economic Cooperation and Development (OECD), says that it wants to achieve agreement on technical issues by July.
France, which had been about to introduce its own digital tax system, has postponed the project until the current discussions are concluded.
Previously, Bruno Le Maire has accused Apple and Google of "abusive commercial practices" for their dealings with local app developers.
Apple Store Champs-Elysees, France.
Following the European Union's unveiling of its strategy for digital taxation, world financial leaders are meeting to discuss how to create and implement a global system. At the same time, US Treasury Secretary Steven Mnuchin has said that if there is no one overall deal, Washington will threaten tariffs to prevent the creation of different tax systems in different countries.
"We've been very consistent in saying we think the digital services tax is discriminatory in nature against digital companies, and specifically a handful of U.S. companies," he told reporters, according to Reuters. "The president was clear that we were proceeding with ... reciprocal tariffs."
At the two-day G20 economic conference in Riyadh, Saudi Arabia, French Finance Minister Bruno Le Maire emphasized the importance of global accord. He said that the conference was on track to debate the issues for the rest of the year.
"For the first time there is wide consensus among the G20 members on the necessity of having a new international taxation system," Le Maire said.
"We have to address the issue of digital companies making profits in many countries without any physical presence, which means without paying the due level of taxes," he said. "And we also have to address the key question of minimum taxation and the risk of having a race to the bottom on taxation."
"There is a consensus to build a solution by the end of 2020," Le Maire continued. "Let's be clear -- either we have at the end of 2020 an international solution... clearly in the interest of all countries and digital companies, or there is no solution and ... then it will be up the national taxes to enter into force."
While the discussions have been planned to continue throughout 2020, the Organization for Economic Cooperation and Development (OECD), says that it wants to achieve agreement on technical issues by July.
France, which had been about to introduce its own digital tax system, has postponed the project until the current discussions are concluded.
Previously, Bruno Le Maire has accused Apple and Google of "abusive commercial practices" for their dealings with local app developers.
Comments
The USA is not going to tolerate a bunch of mafia like EU countries imposing harsh digital taxes on mostly American companies and letting them get away with doing whatever they want. The USA also has the power to impose various measures against those thuggish countries to compensate for their extortion and thievery.
We'll have to see how things pan out but the U.S has a lot more to lose than win by rocking the boat so much.
The arrogance is not lost on foreign leaders who will simply have to adapt to possible tariffs, enter tit-for-tat mode or take trade elsewhere.
Now, with every tweet and threat, I feel we are closer to someone calling the U.S bluff. If the Chinese were to dump Boeing and go Airbus to a larger degree than it is, that would put the cat among the pigeons and Trump would only have himself to blame. Of course, taking all that business to the EU would come at a price because the deal world have to swing both ways.
To be honest, I think most foreign leaders now see Trump as the 'outgoing' president and are banking on any successor having to bend over backwards to repair the incredible damage done on just about every level to international relations.
Mnuchin's stance is both obvious and odious; "our way or no way". That kind of dickheadedness shouldn't even be invited, the US has repeatedly shown it has no authority to lead or even be a part of the grown-up conversation.
Yeh, if you believe right wing propaganda.
You misspelled "cash grab".
Would you take the same stance if Alibaba started operating in the U.S. but refused to pay U.S. taxes?
This mob-boss, protection racket thing Trump is trying to pull will have long term consequences. After Bush lied to the world about Iraq and now Trump trying to shake them down the world is realizing the U.S. is no longer a reliable partner and has begun taking steps to shake off any reliance on the U.S.. Even if a responsible person takes the White House this fall, the world now realizes the U.S. can no longer be trusted over time.
Europeans like to fight, but most of the time they fight at home; on the other hand, US fights mainly in other homes...
I am always reminded of the great words of Kerry Packer, a slightly less well known Australian media mogul when he was called before a senate inquiry on tax minimisation thirty years ago
Why do you vote to encourage the mob?
As for who sees Trump as the 'outgoing' president, I'd wager big money on just about every leader. I'm including Boris Johnson in this group too. For a more suitable replacement, let's say practically anybody.
There were hoards on the left (and right) who didn’t think Trump would win in 2016. There is about 100X more reason to think he will win in 2020 than in 2016. The left loves to spin anything to discredit Trump, but like him or not only the most self-deluded believe he won’t be re-elected.
There were hoards on the left (and right) who didn’t think Trump would win in 2016. There is about 100X more reason to think he will win in 2020 than in 2016. The left loves to spin anything to discredit Trump, but like him or not only the most self-deluded believe he won’t be re-elected.