You are here

G-20 finance officials eye solution to digital tax row this year

Washington

FINANCE officials from the Group of 20 (G-20) major economies on Saturday vowed to resolve major differences over taxing big tech companies and reach a broad, consensus-based solution on international taxation this year.

The United States has been at loggerheads over the issue with Britain, France and other key allies, who have adopted or are considering digital service taxes as a way to raise revenue from the local operations of big tech companies.

Critics say that those firms profit enormously from local markets while making only limited contributions to public coffers, but Washington contends that the taxes discriminate against US tech firms such as Google, Facebook and Apple.

The Trump administration this month ratcheted up pressure on France over its 3 per cent digital services tax, saying it would impose additional duties of 25 per cent on French imports valued US$1.3 billion but would hold off on implementing the move while talks continued in the Organisation for Economic Co-operation and Development (OECD).

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

G-20 finance ministers and central bankers on Saturday acknowledged that the Covid-19 pandemic had slowed work towards an international plan, but said that they expected concrete proposals to emerge before their next meeting in October.

"We remain committed to . . . overcome remaining differences and reaffirm our commitment to reach a global and consensus-based solution this year," they said after a virtual meeting.

After the meeting, German Finance Minister Olaf Scholz said: "Fair taxation of international companies and large digital groups is more urgent than ever."

French Finance Minister Bruno Le Maire said that reaching an agreement by year end was "indispensable".

"The (pandemic) crisis proved that these digital giants were the big beneficiaries of the crisis. They must pay their fair portion of tax," he said. REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes