(Bloomberg) — French Finance Minister Bruno Le Maire said Europe should prepare levies on multinational tech firms because a global deal to overhaul taxation rules is being “blocked.”
(Bloomberg) — French Finance Minister Bruno Le Maire said Europe should prepare levies on multinational tech firms because a global deal to overhaul taxation rules is being “blocked.”
Speaking before this week’s meeting of Group of 20 finance chiefs, Le Maire said the US, Saudi Arabia and India are complicating implementation of the 2021 pact.
That agreement, brokered by the OECD and known as Pillar One, would share rights to tax the world’s biggest firms.
Le Maire said the slow progress validates France’s decision to have already created a national levy on global tech firms’ revenues that generates about €700 million euros ($748 million) a year.
“We’ll call for the situation on Pillar One to be unblocked, but the chances of success are slim,” he said Monday. “This calls for a digital tax to be extended to a European level as soon as possible.”
Le Maire’s comments open up the risk of renewed tensions with the US over how to tax global tech companies, many of which are American. The OECD deal was designed to overcome those disagreements and force France and others to drop national levies on revenue from digital firms that Washington says are discriminatory.
Both sides had agreed to put a hold on new digital levies and retaliatory tariffs while the OECD finalizes the global deal. But that process has run into delays.
France is also concerned that the US may struggle to adopt the Pillar One deal because of opposition in Congress. Speaking on condition of anonymity, a Finance Ministry official said Saudi Arabia’s reservations are linked to exemptions from the new tax rules, while India is concerned that developing countries need assistance in implementation.
“We’ve always said that if G-20 countries weren’t able to agree on a fast implementation of digital tax, we’d call for Europe to put it in place,” Le Maire said. “I think we’ve got to that point.”
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