Even if there is an agreement in the OECD, the European Union needs its “gaffa tax”

Even if there is an agreement in the OECD, the European Union needs its "gaffa tax"

Brussels is determined to implement a tax on digital operations, the rate of which will be less than the 15 per cent provided by the OECD reform, but with a broader base.

The international tax reform in the OECD is expected to take a new turn this weekend, with an agreement on the G20 expected. But this plan is not enough on the European side. Brussels has decided to introduce a “GAFA tax” or “digital levy” targeting hundreds of digital companies.

Although an agreement has been reached at the OECD on a global minimum tax, the second tax plan in operation in Brussels is still relevant. Echoing. The OECD reform is not only aimed at the largest multinational companies, but also targets “all digital operations”, including medium-sized companies.

“The OECD agreement is of great concern to many of the 100 largest companies,” said Margaret Wester, Executive Vice President of the European Commission.

Wide plate

27 If they want to expand the net as much as possible, they must, above all, find new resources to finance their recovery plan and repay their debt.

In detail, the commission acts as a tax at a rate lower than the 15 per cent provided by the OECD reform, but has a larger base. It also considers a system that allows both taxes to be complemented, so some companies avoid double taxation.

Constant interruptions

Realizing this European GAFA tax plan is not easy. First, since tax issues have always divided 27, it is difficult to imagine that such a move could achieve unity among member states. For example, Ireland has always opposed the tightening of tax laws as France has been campaigning for years for a European digital tax.

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The European Union wants to implement the plan without pointing fingers at the Americans. However, the latter has never been enthusiastic about the idea of ​​a tax that specifically targets hundreds of digital companies, a large part of which comes from the Atlantic Ocean.

Bercy and Brussels believe that the terms of their digital tax application are in line with the US government … but do not completely abandon the plan in the face of strong US opposition.

Thomas Susportas with Paul Lewis

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