Irish Finance Minister Claims Possibility To Get Tax Deal On Tech Giant This Year

According to the Irish finance minister, a deal between Europe and the United States on the issue of new tax arrangements for digital giants could be had in 2020 itself.

There is a disagreement between countries – especially between the European Union and the US, about how to tax the large tech companies such as Amazon and Apple. While countries in the EU believe that more tax needs to be paid by the tech companies in the region from here where generate revenues, the US is of the opinion that the proposed taxing proposals is unfair for American tech companies.

In June, with the US deciding to pull out of the talks on the issue at the Organization for Economic Cooperation and Development, and then threatening to impose trade tariffs on countries such as France that had already decided to impose individual digital taxes on the tech companies, an agreement any time soon looked highly unlikely.

In an interview to a television channel, Paschal Donoghoe, Ireland’s finance chief, said that he believes that an imminent breakthrough is still possible.

“I think it is possible. I think the rumours of the demise of the OECD process were somewhat overstated,” he said when asked if an agreement was still possible this year.

Similar comments were also made by him in July when he had said: “I think we need to view what is happening inside the OECD at the moment as a pause.”

Back in 2018, in a voting for implementing an EU-wide digital tax as voted against by Ireland and instead insisted on a broader agreement with other countries outside of the European level.

There are a number of large tech companies that have their headquarters in Ireland because of the low tax regimen there.

There will be tensions even if there is no deal at the OECD level this year.

The first major economy to impose its own digital tax, France is set to collect the first payments from tech companies in early 2021. Taxes aimed at tech giants have also been introduced by the United Kingdom and Italy. But the countries have said that once there is a wider international agreement, the taxes at the national level will be changed.

A conclusion of the negotiations might not happen until the start of next year, Donoghoe added despite his optimism.

“I expect to see that process reactivated later on in the year and while I think some kind of an agreement is possible in 2020, my own view is that it will be more likely that you’d see some of this work conclude in the early parts of next year,” he said in the interview on Friday.

In the aftermath of novel coronavirus pandemic crisis, the debate over digital taxation has grown as various governments are struggling for cash for supporting their economies battered by the pandemic.

(Adapted from CNBC.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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