EU Urges US To Resume OECD Digital Tax Talks

Matthew Broersma,
The European Commission's headquarters in Brussels. Image credit: European Commission

EU says it still would still prefer to achieve digital tax compromise through OECD, but will push through new measures at EU level if talks fail

The EU has indicated it is prepared to propose new digital tax measures at the European level if the US does not resume negotiations on the matter with the Organisation for Economic Cooperation and Development (OECD).

The European Commission’s delegation in Washington said it was “committed” to reforms that would see tech giants paying their “fair share” of tax.

The agency considers the matter a top priority, the agency told Reuters late on Friday.

It urged the US to resume negotiations with the OECD, but said it was prepared to take its own initiative if those talks failed.

digital tax‘Fair share’

“We remain committed to ensuring that all businesses, including digital ones, pay their fair share of tax where it is rightfully due,” the Commission said in a statement.

The US pulled out of OECD digital tax negotiations last month, citing a lack of progress.

Earlier negotiations at the EU level were put on hold in order to focus on the OECD talks.

In the meantime, individual countries such as France have implemented measures of their own, but have drawn reprisals from the US.

US trade representative Robert Lighthizer said last week the administration planned to announce countermeasures against France over its digital services tax but would delay implementing them as long as France delayed tax collections from US tech firms.

The US is expected to announce around $500 million (£395m) in tariffs against French imported goods, after a US Section 301 investigation into France’s digital tax that the US said showed discrimination against US firms.

Compromise

The US has launched similar investigations into digital tax plans underway in 10 other countries, including the UK, India and Turkey.

Ireland has indicated it still has faith in a possible compromise at the OECD level.

Irish finance minister Paschal Donohoe last week told CNBC he considered the US pullout a “pause” that could see negotiations resume later this year or early next year.

Ireland was one of the EU countries to vote against an EU digital tax, preferring to take the matter to the OECD.

A number of major US tech companies, including Apple, Google and Facebook, have their European headquarters in Ireland, and as a result the country is wary of any unilateral moves by the EU that could provoke a US backlash.

But some activist groups have seen the US pullout as the signal for the EU to move ahead with its own plans.

Writing last month, Swiss-based labour federation UNI Global Union argued in an opinion piece that “the world cannot wait on the United States to be persuaded on the issue”.

“We have to keep pushing to make companies like Amazon pay their fair share through an EU-wide digital tax, while not letting the Trump administration derail international negotiations,” UNI said at the time.