France rejects the US proposal on international tax reform

* The French finance minister says the new tax rules must be binding * He says that Europe should revive the EU digital tax if the OECD reform fails (Add quotes, background) By Leigh Thomas PARIS, Dec. 6 (Reuters) - France rejects an American idea that companies choose not to participate in an international tax reform proposal, Finance Minister Bruno Le Maire said Friday, urging Washington to negotiate in good faith. The Organization for Economic Cooperation and Development based in Paris is in the midst of the major rewriting of international tax rules since the 1920s, with the aim of updating them globally for the digital era. But France and the United States are already in a collision course on the issue, with Washington threatening heavy tariffs on imports of champagne, cheeses and luxury bags in retaliation for a separate French digital tax that would be replaced once it was reached. a global OECD agreement. US Treasury Secretary Steven Mnuchin raised serious questions about OECD proposals in a letter that was made public on Wednesday, in which international officials criticize the idea of ​​a safe harbor regime. He said that Washington had serious concerns about any movement to abandon certain current tax structures, such as independent transfer prices, according to which companies have to charge the market rate for cross-border transfers within a group, and what is considered a taxable presence a given country Frankly, I don't put much action into the American proposal for an optional solution where companies are free to decide, Le Maire said at a conference on the French fashion industry. I have not seen many companies that freely accept being taxed. We can always count on people's philanthropy, but it doesn't go far for public finances, he added. Until the letter of Mnuchin, the United States had been a great force behind the efforts to modernize international tax rules, which are increasingly put to the test by the rise of large Internet companies. Many governments are deeply frustrated that such companies can obtain legal gains in low-tax countries, such as Ireland, regardless of where their clients are located. The OECD proposed in October to give governments more power to tax large multinationals in the country where the final customer is located. The proposal is to serve as a basis for negotiating the general lines of an agreement in January, with a final agreement that expires later in 2020. Le Maire said that a solution in which companies can choose to participate or not, as they wish, would be unacceptable to France and other OECD countries. He urged Washington to negotiate in good faith, which he said meant that the new rules would be binding. He said that if the efforts in the OECD, responsible for making the proposals of the G20 group of major economies, failed, the EU countries should revive the talks for a European digital tax. (Report by Leigh Thomas; Edition by Richard Lough and Alison Williams) This story has not been edited by The Times of India and is automatically generated from a syndicated feed to which we subscribe. (This story has not been edited by timesofindia.com and is automatically generated from a syndicated feed to which we subscribe.)

comments