everyone is ready to tax the Gafa, except the United States

everyone is ready to tax the Gafa, except the United States

To better distribute tax between countries where multinationals are established and those where their main markets are located, the OECD is proposing to establish new presence criteria, such as the volume of data processed.

To better distribute tax between countries where multinationals are established and those where their main markets are located, the OECD is proposing to establish new presence criteria, such as the volume of data processed.

Mandated by the G20 to set up a Gafa tax at the global level, the OECD presents its project on Wednesday, already approved by the majority of countries which participated in the work. But not Washington, which withdrew from the negotiations.

It is this Wednesday that the Organization for Economic Co-operation and Development (OECD) is due to present to the G20 finance ministers meeting in a virtual conference their detailed plan for the comprehensive reform of the taxation of multinationals. Starting with that of the Gafa, who have for years taken advantage of the shortcomings of the current system to reduce their taxation to gigantic proportions. A 450-page roadmap that certainly has the merit of existing after years of trial and error – the OECD began to look into this issue in… 2013! – but which in the current state will not lead to any progress.

The tax ? a distraction”

Mandated in 2018 by the G20 to propose a draft agreement by the end of 2020, the OECD has failed to find common ground between the 137 countries participating in this marathon of multilateral discussions. The main dissenting voice was that of the United States, the world’s leading economic power, without which no agreement is possible. The latter left the negotiations last June on the pretext that it was a “Distraction from much more important issues like the Covid-19 crisis” as then said the US Secretary of State for the Treasury, Steven Mnuchin. A qualified withdrawal at the time of «provocation» by Bruno Le Maire, and aimed at blocking a global agreement around the taxation of digital giants, all American, no longer on the basis of their physical presence in a territory (the current rule), sometimes very small, but of their presence and digital audience. No way for the Trump administration to endorse a system on the eve of the elections that would amount to making American multinationals pay more taxes around the world, even if it means paying more in the United States. .

In the absence of a political agreement, the OECD does not intend to abdicate, all the more so since, as its Secretary General Angel Gurria has said, the dispersed adoption of national Gafa taxes risks drive to “Reprisals and, ultimately, a trade war”. A situation that concerns France first and foremost. Voted by parliament, a Gafa tax based on the turnover of digital giants has already been levied initially in 2019, before the government agrees to suspend the payment of down payments due in 2020 to give the OECD process a chance. But in the absence of agreement, the deposit on the 2020 tax will be taken by the end of the year, and the balance will have to be paid in early 2021, we told Bercy.

Betting without being able to say it officially on a defeat of Trump next November – president until January 20 in case of defeat, he could however have time to impose customs taxes on luxury products in the tricolor in retaliation for the payment of the Gafa tax – The OECD intends to show the G20 all the benefits that its member states could derive from digital tax reform. That is to say up to 100 billion dollars of new revenue (84.6 billion euros) to be distributed between States which would be “All winners”, assures the OECD, with the exception of tax havens and countries adept at tax dumping such as the Netherlands, Ireland, Luxembourg and Singapore.

According to Olaf Scholz, the German finance minister, a very large majority of the states involved in the negotiation – 131 out of 137 – approve the proposals put on the organization’s table. “It’s a positive signal, and I’m sure that by the summer [2021], we will be able to reach a final agreement ”, he explained a few days ago, speaking of a “Huge step forward”. For his part, the French Minister of the Economy Bruno Le Maire welcomed the “Work carried out at the technical level constitutes a solid basis for finally having a political decision”.

Taxation minimale

Although it still needs to be finalized on certain points, the architecture of the remodeled “2.0” international tax system imagined by the OECD under the leadership of Pascal Saint-Amans, director of the center for tax policy and administration of the He OECD and main negotiator of this titanic dossier, is based on two already known pillars. In order to distribute the tax more fairly between the countries where multinationals are established (such as Ireland for Google and Apple or Luxembourg for Amazon) and those where their main markets are located, the first pillar proposes to establish new criteria presence such as the volume of data processed, the number of subscribers to their services, etc. The question of whether this new regime should concern only the digital giants or all multinationals remains under debate. Before withdrawing from the negotiations, the United States camped on the idea that multinationals should remain free to accept or not this new way of distributing their taxes on the profits between the countries. In short, an optional plan.

As confirmed by Pascal Saint-Amans at Release, the second pillar, which concerns the establishment of a global minimum corporate tax rate of between 12% and 13% in each country, is by far the most advanced. “It would be the beginning of the end of tax competition between countries and this measure is ready and is the subject of a general consensus”, he promises. This minimum taxation should also bring in most of the new revenue expected from this big fiscal big bang. “There is a great dynamic, wants to believe Pascal Saint-Amans who also hopes to reach an agreement by the end of 2021 that would facilitate – without making it obvious – a victory for Democrat Joe Biden in November.

Disappointed NGOs

For its part, l’Icrit, a commission that brings together NGOs and economists (Thomas Piketty, Joseph Stiglitz, etc.) denouncing the tax optimization practices of multinationals whose shortfall in terms of revenue for States greatly exceeds well over $ 100 billion, estimated that these proposals “Are not up to the challenge”. And the Writes to invite countries without delay to take “Unilateral measures” who would at least have the advantage of “Foster higher revenues as long as broader reforms are blocked by core OECD members”.


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