Scholz and Le Maire present a united front on digital and corporate taxation

French Finance Minister Bruno Le Maire (L) greets his German counterpart Olaf Scholz (R) as he arrives for the 50th Franco-German Economic Council meeting at the finance ministry in Paris. France, 19 September 2019. [Ian Langsdon/EPA/EFE]

German Finance Minister Olaf Scholz (SPD) and French counterpart Bruno Le Maire (LREM) are confident that the current OECD negotiations on international tax systems will be concluded by the end of 2020. EURACTIV Germany reports.

At a joint press conference in Berlin on Monday (22 June), the two ministers spoke about special taxes for digital companies and a minimum tax for businesses. This is intended to put a stop to a race to the bottom among countries that aim to attract companies to their shores.

Last week the process suffered a setback after the US left the negotiating table, apparently for good. Scholz nevertheless sees “good reasons to assume that it will work out in the end” and he intends to “do everything possible to find a solution this year”.

However, he left unanswered whether he is striving for an international digital tax without the US. On Saturday (20 June), Scholz told the Frankfurter Allgemeine Zeitung that it was important “not to be scared and to keep at it. And that’s exactly what we’re doing.”

France slams 'provocation' as US halts digital tax talks

France and the US locked horns Thursday (18 June) over taxing digital giants such as Google and Facebook, after Washington said it was breaking off talks aimed at establishing a global framework for making the companies pay larger levies where they operate.

“A provocation” 

Last Thursday (18 June), Le Maire criticised the “provocation” by the United States which, announced in a letter its will “not to continue” OECD-level negotiations.

“I confirm that together with my Italian, Spanish and British counterparts we have received a letter from Finance Minister Steven Mnuchin confirming that they do not wish to continue the OECD negotiations on digital taxation,” Le Maire told radio station France Inter.

“This letter is a provocation,” he added, saying that France, the UK, Italy and Spain had already replied to the United States to reaffirm their commitment to “achieving fair digital taxation as soon as possible”.

“We were only just short of an agreement on the taxation of the digital ‘giants’,” Le Maire continued.

In January, France decided to postpone the levying of such a digital tax until the end of the year to give more time to conclude the OECD talks. At that time, 137 countries had agreed to reach a deal on taxing multinational companies by the end of 2020.

Europe to push ahead with digital tax despite US ‘threats’

The European Commission plans to put forward a proposal for a digital tax if the international efforts fail this year after the US withdrawal, ignoring Washington’s threats if Europe moves ahead.

Support from Paris

During his first international visit since the beginning of the coronavirus crisis, the French minister stressed that Germany could count on France’s support in the negotiations on digital and minimum corporate taxes.

He described the plans for the German EU presidency as a “heavily loaded roadmap” and emphasised the four aspects that he considered important: the Recovery Fund, more integration in the Eurozone, strengthening European sovereignty and, finally, digital and minimum corporate taxes.

Praising the economic reforms launched by President Emmanuel Macron to make France more competitive, Le Maire repeated the French President’s message from the end of the European Council on 23 April.

Macron had called for “further and stronger” work towards European sovereignty, “a concept that France has been pushing for almost three years.”

After all, “in the field of sovereignty, especially economic, industrial, strategic, military, technological and ecological sovereignty, things are moving fast. And in this respect, Europe is at a crossroads in history,” Macron said.

[Edited by Sam Morgan]

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