According to the head of tax at the OECD, there is now a “solid basis” for the global talks on updating international tax rules for the digital age and the situation is good enough to wrap up the negotiation by providing the United States and Europe the required political leadership.
Technical blueprints that provides details of the agreements on how big digital companies can be taxed across borders as well as for global minimum corporate tax would be published on October 12 by the Paris-based organization, said the OECD’s Pascal Saint-Amans.
“There is a dynamic in Europe, there’s a dynamic in the U.S,” Saint-Amans said in an online address to Ireland’s Institute of International and European Affairs.
“We for sure in the OECD think that we now have a very solid basis for finalising the negotiation when we have leadership, when we have leadership from the U.S. on the digital topic., when we have leadership from the European countries, at least those that sponsor the global minimum tax,” he added.
The aim of the blueprint has been to reach an agreement before the end of the year and the details of the proposal are to be discussed by G20 finance ministers at meeting on October 14.
However getting to an agreement by the end of the current year can be a problem because of the US presidential elections to be held in November this year which has, for now, desisted Washington from signing up to the potentially new international agreement.
On the other hand, United States has been accused by France of trying to undermine the talks which is ongoing among almost 140 countries while also urging Europe to create an EU-wide digital services tax by early next year if there is stalemate in the negotiations.
There is however some confidence among the OECD about the next administration of the United States would take up the issue as a priority irrespective of whoever wins the U.S. presidential election in November, Saint-Amans said.
“It is a topic which is now on the radar screen of politicians and will be on the radar screen of whatever administration we have in the U.S.,” he said.
(Adapted from Reuters.com)