ZCZC
BCN-11
TAXATION-INTERNET-G20
G20 digital tax takes step closer
PARIS, June 1, 2019 (BSS/AFP) – Global efforts to impose a unified tax
policy on Google, Facebook and other internet giants have cleared a major
hurdle ahead of a G20 summit in Japan, officials said Friday.
The Paris-based Organisation for Economic Cooperation and Development said
that 129 countries had signed off on a roadmap to grab a fairer tax share of
the companies’ booming sales.
“Important progress has been made through the adoption of this new
programme of work, but there is still a tremendous amount of work to do as we
seek to reach, by the end of 2020, a unified long-term solution to the tax
challenges posed by digitalisation of the economy,” OECD secretary-general
Angel Gurria said in a statement.
The OECD said Gurria would seek the blessing of G20 finance ministers for
the roadmap when they meet in the Japanese city of Fukuoka on June 8-9.
That meeting is in preparation for a full G20 summit involving US
President Donald Trump, Chinese President Xi Jinping and their peers in Osaka
at the end of June.
The summit will be an important staging post on the way to the OECD’s goal
of agreeing the new tax policy by the end of next year.
The research body has been tasked by the G20 to find a technical fix to
the problem of internet heavyweights taking advantage of low-tax
jurisdictions such as Ireland to pay a pittance on their profits and revenues
in other countries.
Japan’s Nikkei business daily said the G20 countries were planning a new
tax policy based on the amount of business a company does in a country, not
where it is headquartered.
The OECD’s roadmap is based on two main pathways: one to determine where
taxes should be paid, the other to ensure a minimum level of tax is levied.
The existing setup has cost governments up to $240 billion in lost tax
revenues, the OECD estimated in 2015. The figure today would be much higher.
But rival proposals are in the mix to address the problem. The United
States is notably pushing for a much wider approach which could ensnare
European and Asian multinationals involved in other sectors beyond
technology.
So the OECD and G20 must find a consensus around a single proposal to
achieve their timeline. In the absence of that, several European nations
including Britain and France have started going their own way, drawing US
ire.
“Today’s broad agreement on the technical roadmap must be followed by
strong political support toward a solution that maintains, reinforces and
improves the international tax system,” Gurria said.
“The health of all our economies depends on it.”
BSS/AFP/HR/0940