Former President Donald Trump’s administration has so far insisted on a “safe port” measure, and multinationals such as Facebook and Google can choose to comply with the new rules. According to The Financial Times, the US move could be a turning point in the digital tax negotiations of nearly 140 countries, organized by the Organization for Economic Co-operation and Development (OECD).
At a virtual meeting of G20 ministers, Yellen said the United States would no longer support the inclusion of “safe port” measures.
One of the closest representatives to the negotiations on the digital tax told The Financial Times that Washington wants to finalize the deal by July. “The coming weeks will be important, but things are moving in the right direction as before,” he said. German Finance Minister Olaf Scholes and his French envoy Bruno Le Myre welcomed the decision of the administration of the new US President Joe Biden.
Digital tax negotiations mainly respond to criticism that large technology companies are not paying a fair share of taxes because they are based on countries that favor them from a tax perspective. For example in Europe it is Ireland or Luxembourg.
Under the proposed rules, global technology companies will be taxed in countries where they are not based, but also provide digital services or other products.
While negotiations organized by the OECD have so far stalled, the digital tax has been introduced separately by several countries, including France, Britain, Italy, Turkey, but also the Czech Republic.
Finance ministers and central bankers are committed to working closely to accelerate the fragile and volatile economic recovery from the effects of the CO-19 epidemic. “We agreed to avoid suspending financial and monetary support in advance,” Franco said.
The G20 delegation also discussed how to help the world’s poorest countries whose economies have been hit hard by the corona virus crisis. Representatives of the largest economies have agreed in this regard to support the strengthening of the International Monetary Fund’s capital so that more credit can be provided. But the specific numbers did not decrease at all.