Negotiations on international tax reform at the OECD are becoming more complicated. On Friday, 6 December, France considered the US proposal for an optional solution for digital taxation "unacceptable".
It was at the Fourth Fashion Forum that the French Minister of Finance, Bruno Le Maire, conveyed the message. He first praised the power of the French fashion and luxury sector, before quickly getting onto the subject of the new threats of US trade sanctions in retaliation for the French "GAFA" tax (see EUROPE 12382/20), which could also target the leather goods sector.
If France is ready to respond, Bruno Le Maire felt that a better solution would be for the United States to participate in "good faith" in international negotiations at the OECD.
In recent days, the United States has been accused of reversing international tax reform. In a letter to the OECD on 3 December, US Treasury Secretary Steven Mnuchin reiterated his country's support for the ongoing negotiations, but proposed a solution based on the 'safe-harbor regime', an approach that would leave companies the choice of whether or not to apply the new OECD system.
Such a solution is "unacceptable" for France, but also for the other OECD partners, warned Bruno Le Maire. Paris has already publicly supported the OECD's proposal on Pillar I (see EUROPE 12377/23), which provides for a binding system for digital taxation. "All the Americans have to say is 'yes' and there will be a consensus", he said.
The situation is also worrying for OECD Secretary-General Angel Gurría. In a letter to the United States on 4 December, he suggested that this new US proposal could have an impact on the ability of the Inclusive Framework to meet the timetable for an agreement.
If no agreement can be reached at the OECD, the EU will have to resume negotiations on a European solution on digital taxation, the French minister warned on Friday. (Original version in French by Marion Fontana)