Digital taxation: Paris calls the G7 to pave the way
French Finance Minister Bruno Le Maire Tuesday urged his G7 counterparts to pave the way for an international agreement on the taxation of digital giants at their meeting Wednesday and Thursday in Chantilly.
A week after the US decision to open an investigation into the French-approved digital tax, the minister tried to urge US leaders to work hard to get a global deal quickly approved by the US. OECD, which has set itself until 2020 to achieve this.
“I am deeply convinced that during this G7, we will be able to find a satisfactory international solution and that this consensus […] will pave the way for an agreement at the OECD,” said the minister at a conference in Paris. Paris devoted to the 75 years of the Bretton Woods agreements.
“This is the best way to solve this problem,” he added, regretting that the US has launched an investigation under the so-called “Section 301” trade law article. This could, depending on the conclusions reached, result in US retaliation.
“This is the first time in our long relationship that the US government decides to open such a procedure against France,” noted Bruno Le Maire, recalling that “France is a sovereign country and will continue to act as such”.
The Mayor has scheduled a meeting Wednesday with his US counterpart Steven Mnuchin just before the official opening of the G7 Finance, a preparatory meeting of the Summit of Heads of State of the G7 to be held in Biarritz late August.
At this meeting, he “will invite Mr. Mnuchin to accelerate efforts to achieve set taxation of XXI th century rather than threatening us with sanctions and retaliation, not necessarily the best policy among allies,” said a French source.
The two men met at the end of June on the sidelines of the G20 summit in Osaka and spoke before the announcement of the opening of the US investigation.
Each time, the French minister reminded his interlocutor that France would withdraw its project of taxation as soon as a global agreement would be found within the Organization for Economic Cooperation and Development (OECD).
Faced with the risk of multiplication of tax projects for digital giants by countries such as France, the United Kingdom or Spain, the United States unblocked at the beginning of the year the negotiations within the OECD which had not been moving forward for several years.
“A tax of the XXI th century”
For its presidency this year of the G7, France has set itself the goal of reducing “the gap between global economic reality and fiscal reality” after the emergence in recent decades of GAFA (an acronym for the American giants) Google, Amazon, Facebook and Apple).
“We need a tax of XXI th century to the economic model of the XXI th century,” explained a source of Bercy.
Another thorny issue is on the menu of great financiers of the planet in Chantilly: the project of virtual currency Libra US giant Facebook, which raises many concerns from ministers and central bankers.
“We can not let companies, which serve private interests, equip themselves with the means of monetary sovereignty. We must act, “said the Mayor during his conference.
The French presidency of the G7 also has the ambition to “put an end to tax evasion” which “allows multinationals to make profits in one place and move them to another where the tax levels are lower.”
The Mayor and his German counterpart Olaf Scholz are “determined to make progress on very concrete results. For the time being, we have the full support of the United States, “Bercy says, even if we exclude any agreement in Chantilly on a minimal corporate tax, which would curb tax optimization.