France Looks To Clinch Summer Deal With US Tech Giants Over Digital Tax

France Looks To Clinch Summer Deal With US Tech Giants Over Digital Tax. image: Pexels

France Looks To Clinch Summer Deal With US Tech Giants Over Digital Tax.

FRENCH finance chiefs expect a deal over a digital tax for tech giants such as Google, Amazon, Facebook and Apple, known as the “Gafa”, to be reached before the end of the summer after the new Biden administration in the United States took away one of the key stumbling blocks in the discussions.

Under the previous president Donald Trump, the US had insisted on a so-called safe harbour clause that would have effectively allowed the tech companies to volunteer to pay the Gafa tax.

However, in a videoconference with G20 colleagues on Friday, Janet Yellen, the new US Treasury Secretary, said her country would engage robustly in the talks and was no longer backing the option of a safe harbour.

France’s Finance Minister Bruno Le Maire told the G20 meeting that an agreement by the summer had to concluded without delay. “This is a major breakthrough,” said Le Maire on social media. “An international agreement on minimum business taxation and taxation on digital services is within reach.”

Daniele Franco, the economy minister in Italy – which holds the G20 presidency – echoed Le Maire’s optimism. Franco said a deal could be struck at a meeting of G20 finance ministers and central bank chiefs in Venice on 9 and 10 July.

The US tech giants have long been accused of exploiting loopholes to minimise their tax bills. Negotiations on the issue have been deadlocked, with the US and the European Union on opposing sides of the argument.

French tax authorities had begun demanding millions of euros from US technology groups in 2020 as they pushed ahead with a new digital services tax that enraged Washington. Facebook and Amazon are among the companies to have received communication from French authorities demanding payment of the tax for 2020, according to French officials.

 


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Written by

Tony Winterburn

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