France Says U.S. Talks Could Produce Agreement on Digital Taxes


DAVOS, Switzerland — France’s finance minister, Bruno Le Maire, said Wednesday that the United States and France had reached a broad framework for using a plan being developed by the Organization for Economic Cooperation and Development to set digital taxes, but that further talks were needed and would take place Thursday.

The announcement came a day after the two countries appeared to strike a temporary truce in a trans-Atlantic spat. President Emmanuel Macron agreed to suspend a French tax on American technology giants in exchange for a postponement of threatened retaliatory tariffs on French goods by the Trump administration.

Any tax framework developed by the O.E.C.D. must meet certain standards, Mr. Le Maire said. “We want the basis to be solid, credible and fair,” he said, later adding, “There is still some work to be done.”

Further talks were also needed among European nations, he said. If a deal could be reached at the O.E.C.D., he said, that would be preferable to European countries acting individually or as a group to impose taxes.

“Europe stands united vis-à-vis the U.S.” on the preference for a broadly agreed tax framework, Mr. Le Maire said.

No comment was immediately available from United States officials. The Treasury secretary, Steven Mnuchin, is expected to hold a briefing in Davos on Thursday.

There have been detailed technical talks with Mr. Mnuchin and Mr. Le Maire’s staff for two weeks, as well as a Sunday night phone call between President Trump and Mr. Macron, the finance minister said.

Mr. Le Maire described the call between Mr. Trump and Mr. Macron as “decisive,” having resulted in an agreement that gave more breathing room to work out further details.

France had drawn scorn from Mr. Trump after officials announced plans to impose a 3 percent tax starting Jan. 1 on the revenues that companies earn from providing digital services to French users. The government estimated a windfall of 500 million euros (about $563 million).

Mr. Trump had insisted that only the United States could tax American-based companies, and threatened to retaliate with American tariffs of up to 100 percent on French wine, cheese, handbags and more.

The fight has not just been limited to France. Silicon Valley’s tech giants are a target for much of Europe. Last summer, the European Commission unveiled a proposal to significantly revamp how the companies are taxed in the 28-nation European Union.

The potential proliferation of digital taxes across Europe and other wealthy nations has alarmed many American companies. On Tuesday, Mr. Mnuchin said in an interview with The Wall Street Journal that Britain and Italy could also face tariffs if they imposed digital taxes.

Negotiations over an international tax scheme might also deal with a global minimum tax on corporations’ overseas profits, such as the one approved in the United States in 2017. A global minimum corporate tax, which addresses issues like double taxation and tax avoidance, would affect a much broader swath of companies than a strictly digital tax.

Mr. Le Maire said France wanted the minimum tax rate and digital taxation issues to be handled as a package.

For a minimum tax rate, he said, “I’ve already given a number around 12.5 percent as a possibility.”

Mr. Le Maire made clear that the digital tax issue was far from resolved.

“We need to address fiscal evasion,” he said. “We have to address the fact that the biggest companies in the world are making huge profits in Europe and everywhere in the world without paying the due level of taxation because they do not have any physical presence — we have to address that question.”

Liz Alderman contributed reporting from Paris, and Jim Tankersley from Washington.

Source: France Says U.S. Talks Could Produce Agreement on Digital Taxes

By By Keith Bradsher

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