IT corporations like Google or Amazon should pay more taxes in their sales markets. However, the OECD does not mention a level for a global minimum tax.
In the dispute over the fairer taxation of large IT companies, there is the first proposal for a “unified approach” at the international level. According to a paper from the Organization for Economic Co-operation and Development (OECD), taxation should not only be based on the respective head office. Instead, international companies such as Google, Amazon or Apple should also pay royalties where customers or users of services sit and companies generate revenues. The paper does not give a concrete percentage for a global minimum tax, for example, with which the sales could be taxed.
The 21-page OECD proposal ( PDF ) is a compromise of several competing proposals from the Member States. It is based inter alia on the considerations of the leading economic powers of the G20 summit in June 2019 in Japan. The paper will be presented next week at a meeting of G20 finance ministers in Washington and is now open to public discussion. The new approach is aimed not only at large IT groups but also at consumer-oriented international companies.
The seven major economic powers (G7) agreed on this summer to agree on a global regulatory framework at the OECD level by January 2020. It should clarify which countries digital companies have to pay taxes. “Failure to reach an agreement by 2020 would significantly increase the risk that countries will act unilaterally, with negative consequences for an already fragile global economy,” said OECD Secretary-General Angel Gurría, adding, “We must not allow this to happen. “
A settled dispute between Trump and Macron
The French government had advanced in the spring of 2019 with the introduction of a digital tax. Affected by the tax are about 30 companies. They are expected to generate an annual sale of at least 750 million euros worldwide and more than 25 million euros in France. The French government expects to receive 500 million euros in revenue.
Finance Minister Olaf Scholz (SPD), however, advocated a uniform global tax rate and has entered into negotiations at the OECD initiated. Last June, the G20 nations said they would set a global minimum tax by the end of next year.
At the G7 Summit in Biarritz at the end of August 2019, US President Donald Trump and French President Emmanuel Macron agreed on the dispute. Should the OECD rule be lower than the three percent French digital tax, companies like Google, Amazon, Facebook, and Apple could reclaim a balance.