ZCZC
BCN-05
TAXATION-POLICY-COMPUTERS-G20-TECHNOLOGY
G20 countries eye tax policy for internet giants: Nikkei
TOKYO, May 30, 2019 (BSS/AFP) – G20 countries are planning a new tax
policy for digital giants like Google, based on the business a company does
in a country, not where it is headquartered, the Nikkei business daily said
Thursday.
The basic policy is likely to be signed by finance ministers from the
Group of 20 countries when they meet next month in the Japanese city of
Fukuoka ahead of the main G20 meeting in Osaka, the Nikkei said.
The policy, targeting firms like Google, Apple, Facebook and Amazon, would
“allocate revenue to countries that provide large user bases for the world’s
digital corporate giants,” the daily said, citing unnamed sources.
The countries will seek to reach a final agreement in 2020, but how the
policy will work remains to be finalised.
One possibility would be to distribute collected tax revenues to countries
based on the number of users a given company has in each country.
That could mean that Facebook, which has centralised its profits and tax
payments in Ireland to take advantage of low rates, would see its tax
payments redistributed to areas where more of its users live.
But details of how the tax will be collected and distributed and which
companies will be affected remain to be finalised, with the Organisation for
Economic Cooperation and Development (OECD) expected to help iron out the
rules.
The issue of how to tax top digital companies has become increasingly
fraught, with several European nations going it alone, drawing the ire of the
United States.
The Paris-based OECD is trying to forge a new global agreement that would
prevent the firms from simply declaring their income in low-tax
jurisdictions, depriving other countries of billions in revenue.
In April, French lawmakers passed the first reading of a bill to impose
taxes on digital advertising, the sale of personal data and other revenue for
any technology company that earns more than 750 million euros ($840 million)
worldwide each year.
A bid to agree a law at the European Union level was scuttled by low-tax
countries like Ireland, which have wooed big tech firms.
Austria has proposed similar domestic legislation.
BSS/AFP/HR/0920