Finance ministers and central bankers of the world’s twenty major economies (the G20) met in Buenos Aires on Saturday 21 and Sunday 22 July. A press release issued after the two days of talks reiterates the desire to work on an international solution to deal with the challenge of digitalisation of the economy.
"We remain committed to work together to seek a consensus-based solution to address the impacts of the digitalisation of the economy on the international tax system by 2020, with an update in 2019", explains the press release, without providing any further details.
"We are on the right track on digital taxation," said French finance minister Bruno Le Maire, who nevertheless supports the European Commission’s proposal to tax before tax earnings for digital platforms at 3% (see EUROPE 11986) as an intermediary solution before considering a long-term solution based on international consensus.
The French minister says that on this question, most European countries want to agree rules at EU level by the end of the year or the start of 2019, whereas other prefer working at the OECD. He said the two approaches were not in opposition to each other but supplemented each other.
The EU's position paper prepared ahead of the meeting in early July makes the search for international solutions for digital taxation a "high priority" and sets the deadline for 2020 – a date confirmed by the G20.
The press release also reaffirms the importance of implementing, at global level, measures to tackle the erosion of tax bases and the transfer of profits (BEPS) and also on all jurisdictions to sign and ratify the multilateral convention on mutual administrative aid on tax questions.
In terms of "fiscal transparency," the G20 calls on the OECD to report by the summit of heads of state in 2018 on the number of jurisdictions that might be found to have not satisfactorily implemented fiscal transparency international standards and to prepare for 2019 as list of jurisdictions that have not made enough progress. The press release explains: "Defensive measures will be considered against listed jurisdictions."
Call for vigilance over virtual currencies. The G20 meeting registered progress on the question of virtual currencies.
"We are asking for a clear and fair regulation. There are real risks linked to anti money laundering and terrorism financing which were highlighted by many, but new financial technologies also offer many new opportunities," said Bruno Le Maire.
The press release focuses on risk: "While crypto-assets do not at this point pose a global financial stability risk, we remain vigilant."
The text notes that cryptoassets do not have the key attributes of sovereign currencies (see EUROPE 11986).
All in all, the text takes up the conclusions from the Financial Stability Council report proposing a surveillance framework for virtual currencies (see EUROPE 12065). The report has been welcomed by ministers and bankers, who are eagerly awaiting the FSC’s future work including an assessment of multilateral responses where required.
Economy. Ministers and bankers back rapid finalisation of responses to the 2008 crisis in order to make financial systems even more robust. An impact assessment of reform of financial infrastructure and incentives for the regulation on derived financial products on regulated platforms will be available for the G20 summit in late November.
In the economic and budgetary domain, the G20 Finance welcomes robust growth but warns of downward risks that have increased, such as the growth of trade and geopolitical tensions (see other article). It notes that international trade and investment are and important growth engine.
Monetary policy is expected to continue to back economic action and budget policy to simulate high-value-added investment and put the ratio of public debt as a proportion of GDP on a sustainable trajectory. (Original version in French by Marion Fontana and Mathieu Bion)