San Francisco (AFP)

Europe, United States, G7: the world powers have embarked on a hunt for ill-taxed profits from Google, Apple, Facebook and Amazon, without certainty that their more concerted efforts than ever will lead to substantial revenues for the States.

The G7 countries (France, Germany, United Kingdom, United States, Canada, Japan, Italy) have stated that they want to introduce a world tax rate of at least 15% on corporations and a more equitable distribution of rights to '' tax the profits of multinationals established in different states.

At the same time, President Joe Biden also wants to raise the tax rate on American companies in general and target in particular those that generate significant profits but pay very little tax.

In any case, the authorities are not hiding, they are after the Gafa.

"The pressure has been mounting for years," notes Lilian Faulhaber, a law professor at Georgetown University.

"But with the pandemic and its economic consequences, countries are finding it even more difficult than before to balance their budgets (...), while voters are increasingly annoyed by these firms which are making immense profits and don't seem to pay so much tax. "

"Tax avoidance and market domination are different subjects, but resentment against one can rub off on the other," notes Alan Auerbach, a specialist in global taxation at the University of Berkeley.

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- Taxation of the 19th century -

The rules under negotiation must tackle tax optimization, which these companies have a perfect handle on.

In the United States, they capitalize in particular on their investments and recruitments to obtain tax credits which reduce to grief their sum to be paid to Washington and to the States.

Elsewhere, they use sophisticated accounting practices to record profits in low tax countries and losses in high tax countries.

"They are not + bad + ethically or morally because they benefit from the advantages that we offer them", underlines Alan Auerbach.

"The international tax system was designed for a time when business domiciliation and value creation took place in clearly identified places (...) Using 19th century tax policies for the 21st century economy is safe. to work".

The first part of the reform wanted by the G7 plans to tax multinationals where they make their profits.

"It's about recognizing the role of people who use the service but also provide something: available brain time (for advertising on Facebook or Google, editor's note)," explains Lilian Faulhaber.

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In Europe, this idea is aimed directly at Ireland, which has relied on favorable taxation to attract companies like Apple.

- "Pinching" -

Not sure, however, that the G7 will achieve its goals.

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Can countries continue to offer tax deductions?

What fraction of the profits will be taxed?

What will become of the digital taxes unilaterally introduced by France, Italy, Spain or even England?

These are all elements that must be negotiated.

It will then be necessary for each State to decide how to apply the possible agreement.

"In the end it will be a pinch but not much more," said analyst Dan Ives of Wedbush Securities.

"Because Big Tech tax structures are among the most complex in the world."

Authorities must cast a net with exactly the right size meshes, so as not to include unrelated companies or let large fish slip away.

Like Amazon, which has always been keen to stand out from Silicon Valley by arguing that its activities were much less dematerialized than other platforms.

In fact, its e-commerce platform is based on very real warehouses, and its profit margin is currently around 6% instead of the 10% set by the G7 for the new domiciliation rule.

But the Seattle firm should be taxed on AWS, its very profitable cloud (cloud computing) subsidiary.

To say that Amazon is not tech, "it's like saying Messi doesn't play football," Dan Ives laughs.

© 2021 AFP