OECD proposes "unified approach" to tax digital giants

Published on : 09/10/2019 – 11:35

Paris (AFP)

The OECD released Wednesday a "unified approach" for the taxation of digital and multinationals, which it will present to the G20 next week, to revive negotiations between different countries and reach a political agreement by June next.

This approach, presented by the Secretary General Angel Gurria, sets a scope of the new tax for groups that have a direct link to the end consumer. It provides a system to determine whether or not a country will be able to tax a multinational, depending on the company's turnover, said the Paris-based institution.

"If the G20 and other countries agree to negotiate on this basis, we could move quickly towards a political agreement," said Pascal Saint-Amans, director of the Center for Policy and Tax Administration of the Organization for Cooperation. and Economic Development (OECD).

"If we are able to ensure that there is a real negotiation, a political agreement could be reached, why not in January, even if it seems too ambitious, but certainly in June," he added , convinced that "the dynamic is rather positive, even if it is extremely complicated".

For its part, Guria, quoted in a statement, issued a warning to the 134 countries that are preparing to negotiate the proposal of the OECD.

"If we do not reach an agreement in 2020, it will increase the risk that countries act unilaterally," he warned, referring to France, which has decided to impose the digital giants on their numbers. business this year.

This "unified approach" responds to the OECD's need to "revive" discussions on the taxation of digital and multinationals, which were stuck around the three "competing" proposals put on the table by the UK, the United States and India.

The OECD proposes to define the scope of the new taxation of multinationals by including groups that "have a significant interaction with end consumers" and excluding those, such as automotive suppliers, who sell their production to third parties. manufacturers.

The approach of the institution tackles the thorny issue of taxation of groups that are commercially present in a country without having a physical presence, as are often the GAFA, acronym for digital giants Google, Amazon, Facebook and Apple.

"This is the volume of turnover that would determine a new right to impose for countries," said Saint-Amans.

For the reallocation of profits between the so-called market countries, the OECD proposes a system based on the residual profit of the group. "If you are very profitable, a percentage of what is above the set threshold will go to the market countries according to a formula" that remains to be defined, he said.

© 2019 AFP