{"id":87265,"date":"2020-10-12T14:24:14","date_gmt":"2020-10-12T11:24:14","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/global-deal-on-taxing-tech-giants-still-beyond-reach-oecd\/"},"modified":"2020-10-12T14:24:14","modified_gmt":"2020-10-12T11:24:14","slug":"global-deal-on-taxing-tech-giants-still-beyond-reach-oecd","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/global-deal-on-taxing-tech-giants-still-beyond-reach-oecd\/","title":{"rendered":"#Global deal on taxing tech giants still beyond reach: OECD"},"content":{"rendered":"

“#Global deal on taxing tech giants still beyond reach: OECD<\/strong>”<\/p>\n

\n The 137 nations trying to hammer out a new global standard for taxing multinational tech firms will not secure a deal by the end of this year as hoped, the OECD acknowledged Monday.<\/p>\n

“The glass is half full: the package is nearly ready but there is still no political accord,” said Pascal Saint-Amans, head of tax policy at the Paris-based Organization for Economic Cooperation and Development (OECD).<\/p>\n

But the OECD, which is leading the talks, does expect to finalise a digital tax proposal “sometime in 2021,” Saint-Amans added, although he acknowledged persistent US resistance to the plan.<\/p>\n

Talks have been labouring on under OECD auspices for the past two years on how to ensure that tech giants pay a fair share of taxes in the countries where they operate, even if their headquarters are elsewhere.<\/p>\n

Governments are facing growing pressure to clamp down on the tax avoidance strategies used by multinationals such as Google, Amazon, Facebook<\/a> and App<\/a>le\u2014the so-called “GAFA”\u2014that are accused of shifting their profits to countries with lower tax rates.<\/p>\n

The coronavirus crisis hindered progress this year on implementing a levy, even though “the COVID-19 pandemic makes the need for a solution even more compelling,” the OECD said.<\/p>\n

Failure to reach a global agreement could prompt some countries to go it alone on digital taxation, further stoking global trade tensions.<\/p>\n

Several European countries including France and Britain have already announced their own levies in the absence of a global accord.<\/p>\n

That has infuriated Washington, which says American companies are being unfairly targeted.<\/p>\n

“Despite the exceptional circumstances, there are a lot of strong feelings and impatience, and the temptation to take unilateral action faced with a measure that will take years to implement,” Saint-Amans said at a press conference at the OECD’s headquarters in Paris.<\/p>\n

Fiscal sovereignty<\/b><\/p>\n

The OECD plan addresses two issues\u2014how to effectively tax firms in every country where they operate, and how to ensure that each country gets a fair portion of a multinational’s taxes.<\/p>\n

An accord would likely set a minimum base tax, potentially of 12.5 percent, that would apply to every company no matter where it is based or declares its income.<\/p>\n

Blueprints for both “pillars” will now be published to serve as a foundation for further talks, the OECD said, and will be presented to an online meeting of G20 finance ministers on Wednesday.<\/p>\n

Yet even if a global framework is agreed, it remains uncertain if governments will enact a plan that effectively requires them to give up a degree of their fiscal sovereignty.<\/p>\n

Oversight of the new system could also prove tricky, since formulas still need to be agreed on which share of profits should be taxed where\u2014a potential administrative nightmare for companies.<\/p>\n

The US has made no secret of its hostility to the current proposals, and pulled out of the talks entirely in June, a move France denounced as a “provocation.”<\/p>\n

Washington later announced billions of dollars in tariffs on French goods in retaliation for its digital tax, though it is holding off applying them for now.<\/p>\n

Paris has also suspended any collection of its digital tax from US firms in hopes of securing a global accord.<\/p>\n

Irish resistance<\/b><\/p>\n

France is also pushing for an EU accord if no OECD deal can be reached, despite resistance from EU member Ireland, a low-tax hub for many American tech firms.<\/p>\n

Nordic countries are also wary of giving the EU new taxation powers, and German officials have also voiced their preference for a global accord.<\/p>\n

Yet some critics say the OECD’s proposals do not go far enough and that big countries are using their influence to try to spare their multinationals big tax bills.<\/p>\n

“The proposals currently being discussed at the OECD are simply not adequate,” said the Nobel-prize-winning economist Joseph Stiglitz, a member of the Independent Commission for the Reform of International Corporate Taxation (ICRICT).<\/p>\n

“We need a formulaic procedure, where you allocate profits in proportion to sales, employment and capital stock,” he said in a video statement Monday.\n <\/p>\n\n

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France slams ‘provocation’ as US halts digital tax talks\n <\/p><\/div>\n

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\n \u00a9 2020 AFP<\/p>\n

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\n Global deal on taxing tech giants still beyond reach: OECD (2020, October 12)
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