The French Finance Minister, Bruno Le Maire, on Friday expressed his country’s support for the European Union’s (EU’s) own digital tax in the first quarter of 2021 if broader efforts to find an international solution failed to translate into concrete results this year.
A news report sourced from Reuters quoted the minister as saying that he wanted to have a fair and efficient international taxation system as soon as possible and ideally within the OECD framework while speaking to reporters ahead of a meeting of European finance ministers in Berlin, Germany,.
Le Marie said: “If you look at the consequences of the economic crisis, the only winners are the digital giants,” Le Maire said.
“I want to make the things very clear: if it proves to be impossible to get a consensus by the end if this year at the OECD level … we should have, by the beginning of next year, 2021, a European solution for digital taxation.”
Le Maire had accused the United States of seeking to undermine international talks to update cross-border taxation for the digital age.
Commenting, German Finance Minister, Olaf Scholz, who is hosting the Berlin meeting as his country currently holds the presidency of the 27-member bloc, said EU finance ministers would discuss the state of play and how to proceed on the matter.
The minister said: “We’re working very hard to get a blueprint on the question of digital taxation in the OECD. And we will work to make it feasible that a global consensus of this question can be reached,”
Scholz further explained that such a deal would be a big success not only for Germany’s EU presidency, but also for the work at the OECD level.
A digital tax is among the proposals to give the EU its own revenues as a way to pay back jointly issued debt during the COVID-19 pandemic.
It would be recalled that the EU had decided last July to jointly borrow 750 billion euros to revive the economy plunged into a deep recession by the COVID-19 pandemic.
Expatiating on the benefits of the initiative, the German Finance Minister said: “The Ecofin will have to solve a lot of problems that we are facing due to the COVID-19 crisis and so it’s a very good thing that after months, when we met in video conferences and other ways of communication, we are present here and able to speak together.
“After we decided to take very big debt as European Union to tackle this crisis together, to work against the crisis and to work on the recovery in Europe, it is necessary that we are also deciding the question how to pay this debt back. And this means that we need to have a decision on European own resources”, Scholz maintained.
Currently, nearly 140 countries are negotiating the first major changes in international tax rules in a generation to account for the rise of big digital companies.
Despite a blueprint for a deal being expected from the Organisation for Economic Cooperation and Development (OECD) in October this year, the aim of reaching an agreement by a year-end deadline is looking increasingly challenging.