US backs EU's call for a global digital tax deal

The French government warns that failure to reach a single, international digital tax system would make business hard for firms including Apple — and the US Treasury agrees.

Following the European Union's unveiling of its strategy for digital taxation, world financial leaders are meeting to discuss how to create and implement a global system. At the same time, US Treasury Secretary Steven Mnuchin has said that if there is no one overall deal, Washington will threaten tariffs to prevent the creation of different tax systems in different countries.

"We've been very consistent in saying we think the digital services tax is discriminatory in nature against digital companies, and specifically a handful of U.S. companies," he told reporters, according to Reuters. "The president was clear that we were proceeding with ... reciprocal tariffs."

At the two-day G20 economic conference in Riyadh, Saudi Arabia, French Finance Minister Bruno Le Maire emphasized the importance of global accord. He said that the conference was on track to debate the issues for the rest of the year.

"For the first time there is wide consensus among the G20 members on the necessity of having a new international taxation system," Le Maire said.

"We have to address the issue of digital companies making profits in many countries without any physical presence, which means without paying the due level of taxes," he said. "And we also have to address the key question of minimum taxation and the risk of having a race to the bottom on taxation."

"There is a consensus to build a solution by the end of 2020," Le Maire continued. "Let's be clear — either we have at the end of 2020 an international solution... clearly in the interest of all countries and digital companies, or there is no solution and ... then it will be up the national taxes to enter into force."

While the discussions have been planned to continue throughout 2020, the Organization for Economic Cooperation and Development (OECD), says that it wants to achieve agreement on technical issues by July.

France, which had been about to introduce its own digital tax system, has postponed the project until the current discussions are concluded.

Previously, Bruno Le Maire has accused Apple and Google of "abusive commercial practices" for their dealings with local app developers.

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35 Comments

GeorgeBMac 11421 comments · 8 Years

About 4 years ago

Huh? Every country has to agree on "one overall deal" or the U.S. will block it with tariffs?

So, the U.S. can do whatever it wants, anyway it wants, whenever it wants. But, with businesses operating in each of their countries, the rest of the world has to march in lockstep (and probably to Mnuchin's drum?).

The arrogance is staggering!

apple ][ 9225 comments · 13 Years

GeorgeBMac said:

Huh? Every country has to agree on "one overall deal" or the U.S. will block it with tariffs?

So, the U.S. can do whatever it wants, anyway it wants, whenever it wants. But, with businesses operating in each of their countries, the rest of the world has to march in lockstep (and probably to Mnuchin's drum?).

The arrogance is staggering!

That's correct. The Eurocrats need to know who the boss is, and in case their deluded minds do not know the answer to that, it's not them.

The USA is not going to tolerate a bunch of mafia like EU countries imposing harsh digital taxes on mostly American companies and letting them get away with doing whatever they want. The USA also has the power to impose various measures against those thuggish countries to compensate for their extortion and thievery.

avon b7 8011 comments · 20 Years

GeorgeBMac said:

Huh? Every country has to agree on "one overall deal" or the U.S. will block it with tariffs?

So, the U.S. can do whatever it wants, anyway it wants, whenever it wants. But, with businesses operating in each of their countries, the rest of the world has to march in lockstep (and probably to Mnuchin's drum?).

The arrogance is staggering!

It is part of the 'you can play, but America must win' approach.

We'll have to see how things pan out but the U.S has a lot more to lose than win by rocking the boat so much.

The arrogance is not lost on foreign leaders who will simply have to adapt to possible tariffs, enter tit-for-tat mode or take trade elsewhere.

Now, with every tweet and threat, I feel we are closer to someone calling the U.S bluff. If the Chinese were to dump Boeing and go Airbus to a larger degree than it is, that would put the cat among the pigeons and Trump would only have himself to blame. Of course, taking all that business to the EU would come at a price because the deal world have to swing both ways.

To be honest, I think most foreign leaders now see Trump as the 'outgoing' president and are banking on any successor having to bend over backwards to repair the incredible damage done on just about every level to international relations.

crowley 10431 comments · 15 Years

I welcome the US tariffs, it'll give Europe the kick to put together its own answers to the cess pool of privacy-violating, tax-avoiding, adware-spewing digital services we get drowned in from the US. There have been plenty of decent digital start ups from Europe, but they get drowned out by the American behemoths that pay for great technology with gross backoffice business practices.

Mnuchin's stance is both obvious and odious; "our way or no way". That kind of dickheadedness shouldn't even be invited, the US has repeatedly shown it has no authority to lead or even be a part of the grown-up conversation.

NinjaMan 64 comments · 4 Years

GeorgeBMac said:

Huh? Every country has to agree on "one overall deal" or the U.S. will block it with tariffs?

So, the U.S. can do whatever it wants, anyway it wants, whenever it wants. But, with businesses operating in each of their countries, the rest of the world has to march in lockstep (and probably to Mnuchin's drum?).

The arrogance is staggering!

What the US is pushing for is consensus amongst participants and insurance against a shake down and prevent some of these nations from saying that unless you pay a 75% tax you'll be blocked from transacting any further in said nation. The US is aligned with the idea of the tax but there needs to be structure...and yes, there will be countries out there looking for the shake down - just look at what happens to tourist in some countries where the local authorities will extort them...you don't think that would happen here?