Fraying patchwork

28 May 2020 By Liam Proud Follow @liamwardproud

The OECD’s efforts to fashion a fairer global tax system are at risk of stalling. France and Britain already levy charges on the revenue of Facebook, Amazon and others. With public debt soaring and the pandemic boosting Big Tech’s sales, a messy patchwork of levies could ensue.

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Pascal Saint-Amans, head of tax at the Organisation for Economic Co-operation and Development, said on May 21 that the United States had sent “sometimes contradictory messages” on a key part of a global effort to update global tax rules for the digital age.

Speaking at a virtual conference organised by the Urban-Brookings Tax Policy Center and the University of North Carolina Tax Center, he also emphasised that the Covid-19 crisis underscored the importance of the international reform effort.

The OECD in October 2019 proposed new rules allowing governments to levy taxes on companies based partly on where their paying users are based. Under most global laws, taxation rights are generally the sole preserve of countries where companies declare profit. The proposal called for the rule to apply to all consumer-facing businesses that meet yet-to-be-specified revenue thresholds, which could vary by country.

France's Finance Minister Bruno Le Maire said at the time that the proposals were “very good”.

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