Has the proposal for a European digital services tax been buried? That is what French Finance Minister Bruno Le Maire seemed to suggest on Thursday, 28 February, on the Public Sénat channel; he now hopes for an international agreement by the end of 2019.
On 12 March, European finance ministers are expected to resume their discussions on the very watered-down Franco-German proposal for a digital services tax, which would only apply to online advertising (see EUROPE 12152).
“Let us be clear: there will not be an agreement on the draft directive on 12 March; but, on the other hand, I think we can reach a new agreement so that there will be a common European position at the OECD”, said the French minister.
And for good reason, the OECD has recently recorded several positive developments in the negotiations on digital taxation at the international level (see EUROPE 12183).
“For the first time, Ireland [...] said that it was ready to tax digital giants if there is an OECD agreement. Things are changing! My American counterpart, Steven Mnuchin, […] said for the first time that the United States wants an OECD agreement on digital taxation”, he noted with satisfaction.
For Bruno Le Maire, a fervent defender of the European solution, this turning point is far from being a defeat, and incidentally, he believes that France has largely played its part in these positive developments.
“At first, everyone laughed at us, saying: ‘It isn’t possible; it’s beyond reach’. We have brought the European States together. Twenty-three out of 27 support our proposal. We convinced the United States […]. We managed to convince Ireland that something must be done”, he said.
According to a European source, a discussion on the proposed European directive is still on the Ecofin Council’s agenda for 12 March. The Romanian Presidency of the Council of the EU has even reportedly increased its ambition and is now aiming for a “political agreement”.
However, Ireland, Finland, Denmark, and Sweden continue to oppose the proposal, while some smaller countries remain sceptical regarding the very low revenue that such a tax could generate compared to the cost of its implementation.
According to this same source, the main purpose of this discussion would be to show that the Council has “tried everything” before definitively burying this proposal and refocusing the debate on the OECD discussions. (Original version in French by Marion Fontana)