OECD expects Biden to appoint negotiator for digital tax

OECD expects Biden to appoint negotiator for digital tax

Globe Live Media, Wednesday, January 27, 2021

The Secretary of the OECD, Ángel Gurría, expressed his urgency for the newly invested president of the United States (USA), Joe Biden, to appoint a negotiator to confirm the commitment of the first declarations with the process to agree on an international tax on large digital companies, which until now the US power has vetoed.

Gurría, who delivered the opening speech at the semi-annual meeting of the OECD forum where this issue is discussed, said he was very hopeful when hearing from the new United States Secretary of the Treasury, Janet Yellen, that his country is committed to these multilateral efforts.

“That is music to our ears,” he said after insisting that this matter has to be resolved quickly, since “he cannot keep waiting because there is a political imperative.”

With the administration of the outgoing Donald Trump, the United States was the only country that opposed an international tax device for large digital companies, negotiated by mandate of the G20 within the framework of the Organization for Economic Cooperation and Development (OECD).

Initially that mandate set the deadline for a final agreement in 2020, but in the face of Washington’s rejection, the G20 gave itself six more months to close the negotiation, which must now continue with a new US representative.

Gurría warned of the risks of not reaching a compromise, firstly because there are already more than 40 countries that have adopted or are preparing their own taxes on digital companies in response to the lack of an international one that guarantees that large companies in the sector pay taxes locally and do not report their benefits in jurisdictions with low or no taxation.

He added that most governments are in favor of a multilateral solution and would be willing to withdraw their national taxes.

He indicated that if these taxes proliferate, there will be retaliation and the fiscal strain could degenerate into “a trade war,” a particularly negative scenario in the current context of the coronavirus crisis.

The secretary general warned that if this challenge is not handled, “the digitization of the economy will solidify imbalances that have existed for a long time.”

Gurría, who will leave his post next spring after three terms of five years each, made a very positive assessment of his work in the field of taxation, in particular with the Global Forum on Transparency and Information Exchange.

In particular, he explained that the end of bank secrecy and common standards for the exchange of information between countries has allowed 107,000 million euros of additional income for public coffers.

Bank deposits in tax havens “have plummeted” by 410 billion dollars in the last decade, thanks in particular to the notification of the existence of 85 million non-resident accounts in which there were more than 10 billion euros. say an amount that is equal to more than half of the gross domestic product (GDP) of the United States.

Ben Oakley
Ben Oakley is the guy you can really trust when it comes to Mainstream News. Whether it is something happening at the Wall Street of New York City or inside the White House in Washington, D.C., no one can cover mainstream news like Ben. Get a daily dose of Trustworthy News by Ben Oakley, only at Globe Live Media.