Paris gives ground to garner support for digital tax
France is willing to wait two years before enforcing the EUs proposed temporary digital tax on revenues in a bid to win over skeptics — but only if the deal is signed before year-end.
That way, the Organization for Economic Co-operation and Development (OECD) would still have the chance to find a global solution to digital taxation by 2020. If that fails, the EUs digital tax would automatically take effect.
Those were the conditions that French Finance Minister Bruno Le Maire put forward today during this months ECOFIN meeting in Brussels, where his peers gathered to find common ground on a digital levy that would target the likes of Google, Amazon and Facebook.
Paris concession came amid continued resistance from Berlin, which is concerned that the EU initiative could trigger U.S. retaliation while creating problems related to double taxation and competition.
German Finance Minister Olaf Scholz reiterated his countrys preference for a global deal during the ECOFIN. He told his peers that hed accept a “revised” version of the EUs digital tax if the OECD deal “cannot be reached” by the summer of 2020.
Le Maire lent support to the German request on timing. But he warned that failure to officially agree on a deal by year-end would “weaken us all,” especially if that led to separate national taxes that would leave the blocs single market “fragmented.”
The digital tax faces heavy resistance from Sweden and Denmark, which rallied behind Irelands opposition to the levy, with both saying they “cannot support the proposal as it stands.”