PARIS - The threat of a new transatlantic trade war diminished after 137 countries agreed to continue negotiations aimed at creating rules for taxing multinational technology companies that receive foreign revenue.
Amazon, Facebook and Google have strained existing rules to breaking point because such tech giants are able to book profits in low-tax countries like Ireland, no matter where their customers are located. TARIFF THREAT France was the first European country to impose a digital services tax, instituting a 3 per cent levy last year that would hit the revenue of large tech firms, including Google, Apple, Facebook and Amazon. The French government agreed last week to delay collecting the tax while work was being done on a global level; if nothing is agreed by December they will collect the 2020 dues.
European Commissioner for Economic Affairs Paolo Gentiloni told Bloomberg TV this month that if the OECD effort fails, then the EU will push for a bloc-wide digital tax of its own. 'SAFE HARBOUR' The OECD has warned that introducing the notion of"safe harbour" could make it more difficult for the negotiations to advance, and said that members this week"expressed concerns" about the approach.