PES President regrets US decision to pull out of digital tax talks

22/06/2020

PES President Sergei Stanishev

PES President Sergei Stanishev

The US administration has decided to withdraw from OECD negotiations on creating international corporate taxation and has warned it will retaliate if European countries plan to go forward with taxing American firms such as Google, Amazon, Facebook and Apple.

PES President Sergei Stanishev reacted to the news saying:

“I am very concerned with this development. Multinational corporations, and especially those operating in the digital sphere, have been doing business for years whilst paying little or even zero taxes. This not only undermines social stability but also financial sustainability. The PES has been a fierce proponent of tax justice, it has been leading the fight against tax evasion and fraud, and has been calling for tax transparency and for developing corporate taxation. It is with great regret that I read the news that the Trump administration does not want to continue international discussion on corporate taxation. A serious effort has been taking place at the OECD and we are close to reaching an agreement by the end of this year.”

“If a deal cannot be reached at international level then Europe should move forward with an EU digital tax proposal. We should not cave in to outside pressure and shall continue to have an open discussion with all our trading partners. Creating a fair, level playing field in Europe and internationally has always been our goal.”

EU countries such as Italy and Spain have announced plans to put in place digital services taxes, which will impose levies on online digital activity taking place in their countries regardless of the company’s physical presence. France postponed the implementation of digital tax earlier this year because of sanction threats and opted for continuing the discussion at OECD level.

The OECD confirmed it will continue talks on developing a multilateral approach to the taxation of the digital economy and will stick to the end of 2020 deadline despite the US’s withdrawal announcement.