The technical agreement reached last week by the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) (see EUROPE 12753/1) is expected to take a further step forward at the G20 Finance Ministers’ meeting in Venice on 9-10 July, where it is expected to be endorsed politically.
All G20 countries have signed up to the Inclusive Framework statement, but satisfaction levels vary between countries. Discussions are also continuing to try to convince the more reluctant countries.
Ireland, Hungary, Estonia, Kenya, Nigeria, Sri Lanka, Barbados, St. Vincent and the Grenadines did not sign the Statement. Meanwhile, Peru has joined the ranks of countries supporting the agreement, bringing the number of signatories to 131.
“Only 8 of the 139 Inclusive Framework members have not yet joined the Statement at this time but they remain engaged and we are confident they will eventually be part of it”, writes OECD Secretary-General Mathias Cormann in his report to the ‘G20 Finance’ (https://bit.ly/3ysX7wk ).
The opposition of the three EU countries is of particular concern, as the transposition of the agreement into EU law will require the unanimity of the Member States.
“I would regret it if the EU were not united in a choice that is a choice of tax justice and efficiency”, French Finance Minister Bruno Le Maire told the press on Tuesday 6 July.
Continuing concerns about the EU’s digital levy
In the background, US fears about the EU’s future digital levy persist, while the European Commission has decided to postpone the presentation of its proposal by one week - from 14 to 20 July.
“There is nothing directed against the Americans”, said Bruno Le Maire, explaining that this tax is part of a wider package of own resources for the EU budget to pay for the European Recovery Plan.
At a press conference on Tuesday, European Commission Executive Vice-President Valdis Dombrovskis said the EU institution was working with the EU’s international partners to ensure that the future digital levy does not interfere with the OECD process.
“The nature of the digital levy will be quite different from the previous Commission proposal on a digital services tax”, he said.
The European Finance Ministers will also receive the US Treasury Secretary, Janet Yellen, on Monday 12 July in the margins of the Eurogroup, which will be, according to the French Minister, an additional opportunity to reassure the United States about this tax project.
Asked on Wednesday about the risk of renewed trade tensions with the US if the EU goes ahead with its proposal, the Commissioner for Economy, Paolo Gentiloni, dismissed the possibility. The proposed levy is “a completely different tool” from the international tax reform currently underway and will not bring discrimination, he said. (Original version in French by Marion Fontana)