Britain, France Suggest Phased Approach to Global Digital Tax Talks

added 28.06.2020 22:53

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Critics say the firms profit enormously from local markets while making only limited contributions to public coffers, but Washington says the taxes discriminate against US firms and has opened trade investigations into the charges in several European countries.

"We believe that a phased approach, initially focused on automated digital services, would ...make a political agreement within reach this year," Mnuchin's four European counterparts to the talks at the Organisation for Economic Cooperation and Development said in the letter, seen by Reuters.

In the absence of a global deal, US has threatened trade retaliation against European countries that create digital taxes as a way to raise revenue from the local operations of big tech companies such as Alphabet's Google and Facebook.

Britain, France, Italy and Spain suggested a "phased approach" to unblock global digital taxation talks in a joint letter to US treasury secretary Steven Mnuchin last week, rebuffing his call for a pause in negotiations.

Although the US has pushed for a broader scope to include non-tech companies with digital businesses, the OECD said in May there was emerging consensus to focus on digital companies, in line with calls from European countries.