Coronavirus makes EU digital tax more relevant than ever, French minister says

FILE PHOTO: French Economy and Finance Minister Bruno Le Maire on his phone outside the Finance Ministry in Bercy before an interview, during the outbreak of the coronavirus disease (COVID-19) in Paris, France, April 24, 2020. REUTERS/Benoit Tessier

PARIS (Reuters) – French Finance Minister Bruno Le Maire revived calls on Monday for a European tax on digital businesses, saying the coronavirus crisis made such levies more pertinent than ever.

Nearly 140 countries are negotiating the first major rewriting of international tax rules in more than a generation, to take better account of the rise of big tech companies that often book profit in low-tax countries.

However, the fallout from the coronavirus outbreak has left finance ministries more focused on saving their economies than overhauling outdated tax rules, making a deadline of the end of the year to wrap up the talks look increasingly stretched.

Le Maire had said before the crisis that if the talks organised by the Paris-based Organisation for Economic Cooperation and Development fail, then the European Union should create its own digital tax.

“This crisis shows that those who are making out the best are the digital giants, simply because they are able to keep their businesses going and yet they are the ones that are the least taxed,” Le Maire said in a Linkedin Live event.

“My digital tax proposal is more relevant than ever and I hope that our European partners will recognise the absolute necessity to step up the taxation of digital giants,” he said.

Past attempts to create an EU-wide digital tax have failed in the face of opposition from Ireland, where many big U.S. tech companies book profits, and some Nordic countries.

In the face of the deadlock, some European countries, starting with France, have pushed ahead with their own national taxes on digital companies.

France’s tax triggered threats of tariff retaliation from the United States, which have been put on hold to give time for a deal to be reached this year at the OECD.

Reporting by Leigh Thomas, editing by Larry King

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