Discussed at the ‘Economic and Financial Affairs’ Council (Ecofin) in November 2019, the reform of digital taxation negotiated at the OECD (see EUROPE 12385/7) will once again be on the agenda of the meeting of European finance ministers on 21 January.
According to a European source, it was Luxembourg that had requested that the item be placed on the agenda. The country, whose influence at the OECD is limited, would indeed like to see some coordination among European countries on the major aspects of the reform.
According to a note from the Croatian Presidency of the EU Council, dated 10 January and copied to EUROPE, the discussion seeks to take stock of progress in the negotiations which are “about to reach a crucial phase”, before the next meeting of the OECD Inclusive Framework on BEPS on 29-30 January.
The Presidency states that it intends to participate actively in the OECD negotiations and that it plans to hold regular technical meetings and preparatory discussions.
The meeting of the High Level Group on Taxation on Wednesday 15 January will allow delegations to have a first exchange of views on the OECD proposals before Ecofin.
According to the note, delegations should also “discuss possibilities of identifying common elements for EU Member States to address in the OECD negotiations, exchange views on how to proceed with the work on EU law compatibility of the solutions negotiated in the OECD and comment on the two pillars, their effect on EU law, on the level playing field and on EU competitiveness”.
According to our source, the discussions could also address pillar II of the reform, namely minimum taxation for multinational companies, which is supported by France and Germany but opposed by several European countries, such as Luxembourg and Ireland.
It is hard to imagine that transatlantic tensions over the French ‘GAFA’ tax will not be raised, when Paris and Washington have given themselves until the World Economic Forum in Davos, 21-24 January, to “find a compromise at the OECD” (see EUROPE 12398/6). The French Finance Minister, Bruno Le Maire, is expected to seek support from his European counterparts. (Original version in French by Marion Fontana)