PARIS (Reuters) – A planned overhaul of the international tax rules for the digital age could be drafted in 2019, after the United States and Ireland indicated that they wanted a deal, the French Finance Minister Bruno Le Maire said on Thursday.
The French Economy Minister Bruno Le Maire arrives for the 34th annual dinner of the Representative Council of Jewish Institutions of France (CRIF – Conseil Representatif des Institutions juives de France) on February 20, 2019, in the Louvre Carrousel in Paris. Ludovic Marin/Pool via REUTERS
Some 127 countries and territories, agreed last month to tackle some of the most controversial issues of international taxation, such as where the digital companies’ cross-border income should be taxed.
France has spearheaded efforts of the EU and at international level to change the rules that currently allow companies such as Facebook and Google, to reduce tax bills by booking income in low-tax countries like Ireland.
The Organization for Economic Cooperation and Development is working on a draft agreement, which officially aims to have ready in 2020, probably for a summit of the Group of 20 economic powers to the end of the year.
Le Maire said that for the first time in both the United States and Ireland had expressed support for an OECD deal on taxation of digital companies in discussions with his colleagues from the two countries in the past two days.
“Two years ago nobody wanted the taxation of digital companies, for us it was the French who the subject on the table out of concern for tax justice, justice and efficiency,” Le Maire told Public Senat television.
He said the countries of the European Union were not likely to agree to an EU-tax on digital businesses at the next meeting of the eu ministers of finance. But he was optimistic about the progress at the OECD level can be made within the year.
“I think we can come to a new agreement and a common European position on the OECD,” Le Maire said.
“With the European Commission (and) the support of the United States, we get a digital tax proposed at the international, at the level of the OECD, by the end of 2019,” Le Maire added.
The French government had hoped to achieve going next month for an EU-wide digital tax that can serve as a model for a broader deal at the OECD.
Ireland and few other countries remain opposed to the EU-level deal, which kills off all the chances that the reality is as the EU tax decisions must be taken unanimously. However, Ireland is now ready to continue with something on the broader OECD level, including the United States, Japan, Mexico and others.
Reporting by Leigh Thomas and Miriam Rivet