In the wake of the announcement of the opening of new US investigations into the taxation of digital services in a dozen countries and the EU (see EUROPE 12497/28), all eyes seem to be turning to the OECD, where it is becoming more urgent than ever to find an international agreement on digital taxation (see EUROPE 12497/18).
On Wednesday 3 June, the European Commission indicated that it had received the US notification and intends to reply in due course, after careful examination.
If the EU finds itself on the US authorities’ radar, it is because it put forward, when presenting its European recovery plan, the possibility of raising a digital tax to generate new own resources that could finance the crisis.
Already introduced in 2018, the proposal for a European tax on digital services had been a failure and the Member States were unable to reach agreement (see EUROPE 12212/6).
“The Commission and EU Member States are committed to agreeing structural and long-term global solutions to questions of where digital services should be taxed. We are working hard within the Organisation for Economic Co-operation and Development to achieve that goal, with the objective of reaching outcomes by the end of this year”, said a spokesman.
In all cases, the US investigation will have to comply with international law and, in particular, WTO rules. “In this as in all other trade-related matters, the European Union will react as one”, he said.
Among the European countries targeted are Austria and Italy, which have already adopted their national taxes on digital services, but also Spain and the Czech Republic, which are simply considering doing so.
The subject was discussed at the G7 Finance Ministers’ conference call on Wednesday. On Twitter, Italian Finance Minister Roberto Gualtieri said that he had reiterated at the meeting the need to reach an international agreement quickly.
“Digital taxation is the right answer to the question of fairness and equal tax treatment between traditional and digital companies, the only ones that have not suffered the enormous impact of the crisis”, he said.
The same goes for the French Finance Minister, Bruno Le Maire, who assured on Twitter that “France will not give up anything on digital taxation” and called for work to be speeded up at the OECD. France was the first country to be the subject of a US investigation for its digital services tax in July 2019 - an investigation that has not yet been concluded (see EUROPE 12294/10).
Bluff?
Real threat of a trade war or mere intimidation? Such a decision would imply penalising taxes that are, for the EU, still at the draft stage. It would also imply that the United States would engage in a new tariff war with major trading partners. Finally, it should be recalled that the GAFA are also calling for a harmonised solution to be identified as soon as possible at the OECD.
It now remains to be seen whether this announcement will actually help to identify a compromise. (Original version in French by Marion Fontana and Hermine Donceel)