US trade representative to publish investigation into French digital tax | Squawk Box Europe
It looks like Silicon Valley tech companies are more likely to face new global tax laws this year as changes in the White House fuel European officials’ optimism that an agreement will soon be reached..
In a conversation with CNBC Annette weisbach, German finance minister Olaf Scholz mentioned that now «very likely», that the OECD-level tax deal will be closed before summer.
«I’m really confident that we will reach an agreement», – he said just a day after his telephone conversation with the new US Treasury Secretary Janet Yellen.
Yellen backed calls for a new global tax on tech giants during a Senate confirmation hearing last week. She also pledged that the United States will actively participate in negotiations with other OECD countries after the previous administration decided to withdraw from negotiations in summer 2020..
OECD wants to conclude international agreement on how to tax tech giants by summer after similar agreement failed to reach in 2020.
Despite the lack of consensus at the OECD level, several European countries have introduced their own taxes on digital data, including Spain, Italy and France. In particular, France became the first country to demand payments from digital giants, while other countries suspended taxation pending the outcome of the OECD negotiations..
If negotiations with the OECD fail again, the European Commission, the EU’s executive arm, is expected to announce a tax on digital technologies across the EU. This tax must be unanimously approved by all 27 EU countries, which has been challenging in the past..
Disagreements over how to tax these companies sparked a transatlantic dispute during the presidency Donald trump. The former American president, in turn, threatened to impose trade duties on German automakers..
«It is very likely that we will achieve the success that we work so hard to achieve.», – Scholz said on Thursday.
«The new administration impressed me, they understand the need for an agreement in this area and will work on solutions together with all of us, which I consider a great, great success. Everyone knows that the schedule is very strict, in the summer everything must be coordinated», – he added.
The German minister praised his American counterpart after Wednesday’s conversation. He said that «pragmatic approach» in US-European relations seems to be making a comeback, adding that it is «good chance for a new transatlantic partnership».
French finance minister Bruno le maire also welcomed the support of the presidential administration Joe biden regarding the proposed global tax. Speaking on Monday at the Davos Agenda Summit, he said that, in his opinion, the multilateral agreement could enter into force this spring..
«I think this is very good news that the new Treasury Secretary Janet Yellen has just explained that she is open to discussing the idea of a new international taxation on two fronts: firstly, digital taxation and, of course, also minimum corporate taxation.», – said the head of the French Ministry of Finance.
«I think we are on the right track. It is possible to reach agreement on this new international tax system by the end of spring 2021. And I can tell you that we will do our best to pave the way for an agreement», – Le Maire told CNBC Jeff cutmore.