The G20 goes ahead with its digital tax projects on the global giants of technology

The G20 is pursuing its plans to close international loopholes used by technology giants to reduce their taxes. In a draft communiqué obtained by Reuters, the group said that he endorsed the "ambitious" approach to two pillars of a so-called digital tax, and that it "will redouble [its] efforts for a consensual solution with a final report by 2020 ".

The first of these two pillars is that countries are supposed to tax companies based on the place of sale of their goods and services rather than their place of residence. Secondly, they will apply an overall minimum tax rate so that even if a company transfers its sales to a country where taxes are lower, like Luxembourg, the benefits will be limited.

Much remains to be done to reach consensus on these regulations. The United States is concerned that any digital tax will discriminate against local technology companies, while G7 members would disagree on the second pillar of legislation. The plans will have to deal with a number of sensitive issues, including the definition of a digital business and the question of who has the final say in corporate taxation when it straddles more than one country.

Fiscal pressure to implement global tax solution more and more following EU's drop in digital tax earlier this year in light of Ireland's opposition and the Nordic block. The EU plans to reopen the debate if the reforms planned by the OECD are delayed. In addition, the UK has introduced its own "Digital Services Tax" projects in light of the OECD's "painfully slow" progress towards tax reform, which is expected to be implemented in April 2020.

The amount of taxes paid by the world's largest technology companies has long been a source of frustration for the countries where they are headquartered and where their end customers are based.

In 2018, a report claimed that Google had saved up to $ 3.7 billion in taxes in 2016 by transferring money between Ireland, the Netherlands, and Bermuda. . In 2017, reports revealed that Apple had transferred two of its Irish subsidiaries to Jersey after the EU had put pressure on Ireland to eliminate its loopholes. tax. Meanwhile, Amazon has not paid any taxes on federal corporations in 2018 despite profits of $ 11.2 billion.