BERLIN, GERMANY – APRIL 9: Federal Finance Minister Olaf Scholz, SPD, gives a press release ahead of a Eurogroup video conference on April 9, 2020 in Berlin.
Thomas Imo
LONDON – Silicon Valley tech firms will increasingly face new global tax laws this year as the White House amendment fuels optimism among European officials that an agreement will be reached soon.
In an interview with Annette Weisbach from CNBC, Federal Finance Minister Olaf Scholz said on Thursday that it was “very likely” that a tax agreement would be concluded at the OECD level before the summer period expired.
“I am very confident that we can reach an agreement,” he said just a day after speaking to the new US Treasury Secretary Janet Yellen by phone.
Yellen backed calls for a new global levy on tech giants during a Senate confirmation hearing last week. She has also pledged that the US will actively participate in negotiations with other OECD countries after the previous administration decided to pull out of talks in summer 2020.
Two pillars
The OECD wants to have an international agreement on the taxation of technology giants by the summer. A number of European countries are hoping to impose taxes above a certain turnover threshold on digital companies, which, due to their size, would mainly hit US tech companies.
The tax reforms consist of two pillars. The first pillar relates to the digital economy and could result in profits being taxed where customers are. Pillar two refers to a global minimum tax rate that does not take into account where companies are headquartered.
Differences in the taxation of these companies had caused a transatlantic dispute during the presidency of Donald Trump, who threatened to impose tariffs on German automakers on various occasions.
“We have to agree in the summer”
“It is very likely that we will achieve the success we are working so hard for,” said Scholz on Thursday.
“And the new government has given me the impression that they understand the need for an agreement in this area and will work with all of us to find solutions, which I consider a great, great success. And everyone knows that this is the timetable . ” Very strict, we have to come to an agreement in the summer, “said Scholz on Thursday.
The German minister praised his new US counterpart more generally after Wednesday’s talks. He said the “pragmatic approach” in US-Europe relations appeared to be returning, adding that there were “good opportunities for a new transatlantic partnership”.
French Finance Minister Bruno Le Maire also welcomed the support from President Joe Biden’s administration for the proposed global tax. At a Davos agenda panel on Monday, he said he believed a multilateral agreement could come into force this spring.
“I think it is very good news that the new Treasury Secretary Janet Yellen has just stated that she was open to the idea of considering a new international taxation based on the two pillars: first of all digital taxation and of course minimum taxation corporate income tax. “
“I think we are on the right track. There is a possibility of reaching an agreement on this new international tax system by the end of this spring 2021. And I can tell you that we will do our best to pave the way for one to pave new things. ” Agreement, “Le Maire told CNBC’s Geoff Cutmore.
– CNBC’s Sam Meredith contributed to this article.
Comments are closed.