Stephen Mochipet: Kevin Dietsch / Reuters
The United States stopped the negotiations with the countries of the European Union for the introduction of a digital tax on the profits of American tech companies, writes the Financial Times.
Europe expects to recover from the crisis through taxes and money from the tech giants was part of the plan. However, he failed — the Treasury Secretary Steven Mnuchin said that the discussion had stalled. The country is even a “temporary basis” are unable to agree on changes in the tax laws that affect leading us digital company. The United States threatened the EU with retaliation if they will promote my own taxes.
At the beginning of the 2019 European governments are unable to impose a digital tax in the EU and started negotiations with the Organisation for economic cooperation and development (OECD) to find a common approach.
Before their completion, some European countries decided to impose a tax on their own. France was the first major economy to do so. The situation has caused tensions in relations with the US, they threatened to impose tariffs on certain French products. In January, both countries agreed to continue negotiations at the OECD level, digital taxes were temporarily abolished.
The Minister of economy and Finance of France Bruno Le Mayor called a provocation by the US refusal to discuss digital tax. “We were already very close to an agreement on the taxation of digital giants,” said he, adding that these companies might be the only one who got huge profits during a pandemic coronavirus.
Meanwhile, the UK, Italy and Spain have developed their own proposal for a digital tax in case negotiations under the auspices of the OECD will not succeed.
The EU had planned to impose a tax on the profit digital companies (Google, Amazon, Apple, Facebook), because their revenues are difficult to track at national level. Because of this, many corporations are incorporated in countries with low tax rates, for example, in Ireland.
The European Commission in June announced the extension of financial assistance to crisis-affected countries to 1.35 trillion euros.
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