Europe warns digital taxes without deal
US quits negotiations, stokes fears of new trade war
PHOTO: FILE
PARIS/BRUSSELS:
The European Union said on Thursday it could impose taxes on digital giants such as Google, Amazon and Facebook even without a global agreement by the year-end, after Washington quit talks and stoked fears of a new trade war.
The latest transatlantic row was ignited when the United States said on Wednesday it was withdrawing from negotiations with European countries over new international tax rules on digital firms, saying talks had made no progress.
Nearly 140 countries are involved in the talks organised by the Organisation for Economic Cooperation and Development (OECD) on the first major rewrite of global tax rules in a generation to bring them up to date for the digital era.
“A trade war, especially at this point in time, where the world economy is going through a historical downturn, would hurt the economy, jobs and confidence even further,” OECD Secretary General Angel Gurria said, urging all sides to reach a deal.
The talks aim to reach agreement by the end of 2020, but that deadline is now slipping out of reach with Washington’s latest move and the US presidential election in November. Finance Minister Bruno Le Maire said France, Britain, Italy and Spain had jointly responded on Thursday to a letter from US Treasury Secretary Steven Mnuchin announcing the pullout.
Spain’s government said it and other European nations would not accept “any type of threat from another country” over the digital tax. Italy said it was committed to a global deal. European countries say tech firms pay too little tax in countries where they do business because they can shift profits around the globe.
Published in The Express Tribune, June 19th, 2020.
The European Union said on Thursday it could impose taxes on digital giants such as Google, Amazon and Facebook even without a global agreement by the year-end, after Washington quit talks and stoked fears of a new trade war.
The latest transatlantic row was ignited when the United States said on Wednesday it was withdrawing from negotiations with European countries over new international tax rules on digital firms, saying talks had made no progress.
Nearly 140 countries are involved in the talks organised by the Organisation for Economic Cooperation and Development (OECD) on the first major rewrite of global tax rules in a generation to bring them up to date for the digital era.
“A trade war, especially at this point in time, where the world economy is going through a historical downturn, would hurt the economy, jobs and confidence even further,” OECD Secretary General Angel Gurria said, urging all sides to reach a deal.
The talks aim to reach agreement by the end of 2020, but that deadline is now slipping out of reach with Washington’s latest move and the US presidential election in November. Finance Minister Bruno Le Maire said France, Britain, Italy and Spain had jointly responded on Thursday to a letter from US Treasury Secretary Steven Mnuchin announcing the pullout.
Spain’s government said it and other European nations would not accept “any type of threat from another country” over the digital tax. Italy said it was committed to a global deal. European countries say tech firms pay too little tax in countries where they do business because they can shift profits around the globe.
Published in The Express Tribune, June 19th, 2020.