Digital tax: the OECD takes a crucial step

The OECD this week took a crucial step towards a global agreement on the taxation of digital giants (GAFA) with the approval by nearly 130 countries of its roadmap, and is now awaiting “political support” from the G20. “The sleeves are rolled up and people are at work,” said Pascal Saint-Amans, director of the OECD’s Center for Tax Policy and Administration, which brings together the world’s major industrialized countries, at a conference telephone.

The United States, which had blocked negotiations for years, lifted obstacles in January and paved the way for the search for a global agreement, as OECD Secretary General Angel Gurria told AFP , in January, on the sidelines of the Davos Economic Forum (Switzerland).

During a meeting held on Tuesday May 29 and Wednesday May 30 at the headquarters of the Organization for Economic Co-operation and Development (OECD), 129 countries approved the “roadmap for resolving the fiscal challenges raised by the digitization of the economy “.

The next important deadline will take place at the G20 Finances, scheduled for June 8 and 9 in Fukuoka (southwest of Japan), where the OECD will present its “road map”, and ask the main world economies to come to an agreement, by the end of the year, on a common track to reach a global agreement by the end of 2020.

“Unify” approaches

“We want to have a political agreement, by the end of the year, on a single approach”, explained Mr. Saint-Amans for whom the deadline could be another G20 Finance scheduled for mid-October in Washington , on the sidelines of the annual meeting of the International Monetary Fund (IMF).

For now, the OECD has three proposals on the table: the British which is limited to “highly digital” companies like “Facebook, Google and platforms like AirBnB or Uber”, indicated the OECD, which was mandated by the G20, which includes China, which has its own digital giants with Baidu, Alibaba and Tencent.

The second, presented by the United States, is intended to be much broader and more ambitious and is not limited to the digital economy. It would extend to all groups which “have distribution” in other countries, such as French luxury companies in the United States, or American firms in Europe. The third and final option was submitted by India. It is more focused on digital and distance sales.

“We will have to unify these approaches before the end of the year in order to reduce them to one,” explained Mr. Saint-Amans, for whom this project goes much further than the taxation of digital technology, the objective being to “find a global and real agreement” to adapt taxation “to the challenges of the 21st century”.

“Consensus international”

“We will try to find a new link, a connection, in order to be able to tax activities in a territory, even if the company that deploys them does not have a so-called business facility, in other words a physical presence. which, to date, triggers the right to impose, “he stressed.

“The aim is to determine who has the right to impose what,” added the OECD official, who also welcomed the change in attitude of multinationals. “Instead of saying to do nothing, they realized that something fundamental was happening.”

Discussions at the OECD on the digital economy resumed at a time when several countries including France, Austria, Great Britain and Spain had announced that they had decided to unilaterally impose the digital giants on their figures. business.

French Finance Minister Bruno Le Maire, however, recalled at the recent OECD annual meeting that his country would withdraw its tax as soon as there was a global agreement.

In a statement, he welcomed the approval of the roadmap. “There is now an international consensus to recognize that our tax rules are no longer adapted to the challenges of the 21st century,” he said.

In addition, the OECD will also look into the proposal made by France and Germany within the G7, to “set up a sort of mechanism so that the profits of multinationals are taxed at a minimum rate”, explained Mr. Saint-Amans.

(with AFP)