French Finance Minister Brune Le Maire's efforts to gather his colleagues in the European Union about new taxes on major digital marketers are still not working very efficiently. Indeed, some countries are still skeptical and disagree. Other countries, including Italy, have announced their intention to continue with their own digital business tax law.
The ministers of Denmark, Ireland and Sweden have said they can not support the tax in its present form, questioning the future of the proposal, as it is necessary to reach a unanimous decision on the transfer of taxes to the EU. Ireland and the Scandinavian countries are still hostile, either because of the fear of losing some of their resources, either for legal reasons and for fear of retribution from EU partner countries.
As suggested, the bill represents a 3% sales tax for digital companies with annual turnover of over EUR 750 million worldwide and an annual revenue of over EUR 50 million in the EU.
This tax would be transient until a global agreement on the GAFA profit tax mechanism was charged, accused of transferring profits to member states such as Luxembourg or Ireland.
It is not surprising to see that France strongly defends this proposal, given its origins with Germany. The Mayor has made concessions to those who oppose this plan and want the EU to wait until the global tax business is successful and does not go through this transition phase of Europe. He said France would support postponement of the date of entry into force of the tax for 2021. It also optimized the debate between the finance ministers in Brussels.
Bruno Le Maire and Giovanni Tria Brussels on November 5th
The discussion shows that we are moving in the right direction, the Mayor said during the hearing on Tuesday. All I have to do is give pashno beer in a pub in Dublin and I think we can make a decision, "he said, referring to his Irish colleague Paschal Donohoe.
It should be borne in mind that Germany, which initially supported the French proposal, was reserved, particularly in view of the United States' threats to export it.
At the end of October, German finance minister Olaf Scholz proposed the introduction of global income tax and more restrictive measures to transfer funds to tax havens to prevent companies from avoiding tax through these transfers and tax optimization. We need a global tax threshold under which no country can collapse, Olaf Scholz told Welt am Sonntag, stressing the importance of taking measures to combat tax evasion. Olaf Scholz says he has initiated an initiative to help states react to the tax deprivation of other states, relying on OECD work on this issue.
Coordinated mechanisms are needed to prevent the transfer of income to tax havens, he said, adding that the EU lags behind in this area.
Many days later, France and Germany have not yet reached agreement on the taxation of large digital commerce trade, but Paris still hopes to reach an agreement on the European level by the end of 2018, French Finance and Finance Minister Francois Hollande said on Monday.
A number of countries already impose their own taxes, which increases the risk of fragmentation of the single market. Finance Minister Giovanni Tria said the Italian tax would come into force next year if no broad agreement had been reached by then. Spain and the UK have already posted their own taxes.
The conflict highlights deep divisions within the Union, as EU governments are struggling to find the balance between attracting profitable business and dealing with popular dissatisfaction with companies that are not paying fair share. Traditional tax systems have so far failed to capture the revenues of world companies, but limit their physical presence, fueling the anger of dissatisfied readers after years of slow growth and low wage growth.
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