Digital taxation: the draft OECD agreement expected by the end of 2019

Paris (AFP)

France and the OECD announced Thursday to have set up a working group including the United States to achieve by the end of 2019 a formal proposal for an agreement on the international taxation of digital giants .

"There was an agreement at the G7 Biarritz on the taxation of digital Now we want to accelerate the technical work," said the Minister of Economy Bruno Le Mayor after an interview in Bercy with the secretary General Angel Gurria.

"If we want to have an agreement in the first half of 2020", as was decided by Emmanuel Macron and Donald Trump during the G7, "we need to have the formal proposal of the OECD by the end of the year 2019, "added the minister.

The Mayor, who will visit Washington next week to continue talks with US Treasury Secretary Steven Mnuchin, said a "technical working group" would be set up between "France, the United States, United and OECD "to" work on this issue ".

x "The + task force + which works on the taxation of digital today at the OECD is co-chaired by France and the United States, so it is perfectly legitimate" that these two countries work alongside the OECD "on this solution there," he defended.

According to the Secretary General of the Organization for Economic Co-operation and Development (OECD), this "task force" has "worked hard" in recent months. "We are in a position to have a proposal, the substance of what could be the agreement, towards the end of the year," he said.

Nearly 130 countries will be affected by this agreement, developed under the auspices of the OECD. The goal is to "create a tax model for the 21st century", taking into account that many companies no longer have a physical presence where their customers are, Gurria said.

The draft agreement on which the OECD works is based on two pillars: a breakdown of taxes collected from multinational companies between the countries where they sell their goods and services, and the application of a minimum tax rate on companies at the international level.

According to the director of the OECD Center for Tax Policy and Administration Pascal Saint-Amans, who leads this delicate project, a project proposal should be made public before the G20 Finance scheduled for October 17 in Washington.

The agreement concluded Monday between France and the United States about the tax Gafa will allow to "revive the discussion" but many questions remain "in suspense", assured Thursday Mr. Saint-Amans in an interview with the AFP.

Interviewed on Thursday, Bruno Le Maire spoke on his side four difficult points.

The first concerns the definition of the link between digital companies and the territory in which they operate. "Is it the number of clients, is it the number of connections, is it the size of the platforms, all this needs to be discussed?" he expicted.

According to the Minister, the second tricky point concerns the level at which companies must be taxed, and the third is the definition of the type of business involved. "Is this the size of the turnover, is it according to the size of the country?" He asked.

The fourth and final question, on the other hand, is whether particular specificity should be granted to companies "which are purely and exclusively digital". "We consider that this specificity must be taken into account," he pleaded.

Under the agreement reached Monday between Paris and Washington, France is committed to replace the new international agreement with its national Gafa tax, which came into effect this year, as soon as it was adopted and even before it was ratified.

© 2019 AFP