Displaying items by tag: Digital Tax

International tax on digital giants expected in 2020

Written on Monday, 28 January 2019 12:07

An international levy on digital conglomerates such as Google, Facebook, Microsoft and Amazon are expected to be imposed in 2020.

The admission was made by OECD Secretary-General Angel Gurria when speaking at the World Economic Forum in Davos. However, the implementation of the tax is highly complex, with many countries threatening to go it alone, whilst Europe remains divided on the issue.

Gurria said, “It is possible. I believe that the conditions exist to lay the foundations for an agreement this year that could be approved and enter into force in 2020.”

The prediction comes just a year after the tax scheme looked dead in the water as member countries failed to agree on a proposal that was tabled at G20. The Secretary General believes there is space for consensus and acknowledged that 2020 is a more likely timeline for the introduction of the digital tax.

Faced with the difficulties of reaching an agreement within the OECD and even the EU, countries such as Britain, France and Spain have already announced their intention to unilaterally tax the giants.

Surprisingly, some of the digital enterprises at the center of the tax welcome the new levy and said they support the initiative being pursued by the OECD.

During the World Economic Forum in Davos, Google vice-president Ruth Porat supported the negotiations overseen by the Paris-based OECD, which groups advanced economies.

Porat said, “We are very frank, we support the OECD initiative.

In France, Finance Minister Bruno Le Maire had initially defended, without much success, the adoption of a tax on digital giants at the European level.  However, Ireland, Denmark and Sweden have blocked the plan by the EU, while in addition to this powerful Germany was lukewarm, fearing US retaliation against its car industry.

Published in Finance