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Finance ministers and central bank governors of the world's 20
biggest economies (G20) meet on Feb. 22-23 in Riyadh to discuss,
among other issues, the work of the Organisation for Economic
Cooperation and Development (OECD) on the tax rules.
"We need to give the highest priority to finding global
solutions to address the taxation of the digital economy and the
remaining Base Erosion and Profit Shifting issues," said a
document outlining the stance of all European Union members of
the G20, plus Britain, which left the EU last month.
"We look forward to ambitious, fair, effective,
non-discriminatory and workable global solutions and will
redouble our efforts towards a consensus-based solution to
deliver this global goal in 2020."
Europe has long pushed to make hugely profitable large tech
companies doing business over the Internet pay tax where they
sell their services, rather than in tax havens deliberately
chosen under what is called "aggressive tax optimisation".
EU politicians, seeking funds to prevent climate change and
diminish wealth differences across the 27-nation bloc, are angry
that a company like Google, with an annual profit of more than
$160 billion, has been enjoying an effective tax rate in the
single digits on its non-U.S. profits - around a quarter of the
average tax rate in its overseas markets.
Frustrated with the lack of global progress because of
opposition from the United States where the tech giants are
based, some countries like France introduced their own digital
tax last year. Such moves triggered threats of retaliation via
trade tariffs from Washington.
Italy, Britain and Spain have also either already introduced
their own digital taxes or plan to do so.
Bowing to the rising pressure, Facebook Chief Executive Mark
Zuckerberg will accept in a speech on Saturday that global tax
reforms would mean his company may have to pay more taxes in
different countries, Politico reported.
The OECD wants to reach a deal on the technicalities of how much
and where to tax big digital firms by early July and have a full
accord in place by the end of 2020, so as to avoid an escalation
of trade tensions over the issue.
The EU has said that if there is no deal at the G20 level, its
27 countries would come up with digital tax system of their own.
(Reporting by Jan Strupczewski; Editing by Mark Heinrich)
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