(Bloomberg) – Global negotiators trying to rewrite tax rules for the digital age are arguing over a threshold for corporate income as one of the criteria to resolve the contentious issue of how to tax US tech giants installed all over the world. the world, such as Amazon.com Inc. and Facebook Inc.
European officials are considering a proposal by the Joe Biden Administration for companies with at least $ 20 billion in annual revenue to pay more of their tax bill where they operate, while they are less enthusiastic about the offer from states. States to limit taxes to just 100 companies, according to people with knowledge of the discussions.
Negotiators also continue to haggle over a break-even threshold for companies to fall into the tax net, particularly a level that ensures low-margin Amazon pays, said the people, who commented on private conversations on condition of anonymity.
Simply setting a revenue threshold of $ 20 billion would attract more than 500 publicly traded companies, according to data compiled by Bloomberg. A high level of profitability would narrow the list, and previous versions of the OECD plan have shown that countries are also considering exempting certain sectors, such as oil and financial services.
Reaching an agreement on the income and profit parameters of large companies, along with the amount of their profits to reallocate, is necessary for a broader tax agreement that would also include a global minimum tax on corporate profits, which the US has suggested that it be at least 15%.
Such a proposal would generate more than 48 billion euros ($ 59 billion) in tax revenue if it were applied this year in the European Union, and nearly $ 41 billion in the U.S., according to projections released Tuesday by the recently released. created EU Tax Observatory
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The Biden administration is pushing for a global agreement on the minimum tax that would help underpin a US tax reform aimed at funding its $ 4 trillion economic investment program over the next decade. The Administration wants to tighten the US’s own minimum tax rules, including raising the rate to 21%.
On Wednesday, the US announced that it imposed – but immediately postponed implementation for up to 180 days – tariffs in retaliation for the rights that the UK, Italy and four other nations imposed on Internet companies, giving time for negotiations. broader international
Although the US has given hope to the years-long talks with its proposals since early April, persistent disagreements underscore the difficulty of finding common ground among the nearly 140 countries participating in discussions led by the Organization for Cooperation and Development. Economic Development (OECD).
Officials caution that the Group of Seven finance ministers are not expected to agree on these specific points during a meeting in London this weekend, and are more likely to signal general progress towards agreements in the Group of Seven. the 20s and the OECD in the coming months.
“I think we have an agreement in sight and I hope it happens this year,” outgoing OECD Secretary General Ángel Gurría said on Monday when he retired after 15 years at the helm of the group.
Original Note: Global Negotiators Tussle on Revenue Threshold in Tax Talks (1)
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