How to tax tech firms unresolved
whether to be taxed under any new international system — until the end of the negotiations.
“Resolution of this issue is crucial to reaching consensus,” negotiators said in a statement released on Friday.
The talks carry high financial stakes for large companies that operate in several countries.
Countries like France and Britain have approved digital taxes that hit large tech companies, like Google and Amazon, that have large online presences in their countries but face little tax liability because their physical operations are concentrated elsewhere. The United States has objected to those taxes as discriminatory against American firms, which would be among those most affected, and it has threatened tariffs on imports from countries that impose the taxes.
American and French officials reached a temporary truce on the issue last week in Davos, Switzerland, with the Trump administration pausing its tariff threat and the French delaying collection of the digital tax this year while the sides seek a deal through the Organization for Economic Cooperation and Development.
Such a deal still appears difficult — in large part because of the Trump administration’s insistence that some companies be allowed to choose whether to subject themselves to the new tax standards. That could be an especially important option for nontechnology multinationals, like consumer products companies, which have grown increasingly concerned that they could be subject to new taxation under any agreement.
Pascal SaintAmans, director of the organization’s Center for Tax Policy and Administration, told reporters Friday that for “a very large spectrum of countries,” the U.S. position would make any agreement difficult or impossible. Negotiators agreed to delay any dis
“Resolution of this issue is crucial to reaching consensus.”
Statement from negotiators working to establish tax rules for companies operating in more than one country
cussion on that question until all other issues surrounding digital taxation had been resolved.
Still, SaintAmans said, there is “strong political commitment to work together” among negotiators, and he hopes that more progress can be made by July, when negotiators will meet in Berlin.
SaintAmans said the process is moving fast “because what is at stake is a massive trade war” — particularly between France and the United States.
Angel Gurría, the economic organization’s secretarygeneral, said in a news release that negotiators still face a daunting task bridging “critical policy differences,” but that a collapse of the talks risked economic calamity.
“We are convinced that failure to reach agreement would greatly increase the risk that countries will act unilaterally” to impose taxes and tariffs, Gurría said, “with negative consequences on an already fragile global economy.”