Let’s come together to tax tech giants, say G20 officials eyeing $100 billion boost
23 February, 2020, 3:10 pm
RIYADH (Reuters) – Leading world economies must show unity in dealing with aggressive “tax optimization” by global digital giants like Google (GOOGL.O), Amazon (AMZN.O) and Facebook (FB.O), G20 officials said on Saturday.
The Organisation for Economic Cooperation and Development (OECD) is developing global rules by to make digital companies pay tax where they do business, rather than where they register subsidiaries. The OECD says this could boost national tax revenues by a total of $100 billion a year.
The call for unity appeared directed mainly at the United States, home to the biggest tech companies, in an attempt to head off any stalling on the rules until after the U.S. presidential election in November.
“There is no time to wait for elections,” German Finance Minister Olaf Scholz told a tax seminar on the sidelines of a meeting of G20 finance ministers and central bankers.
“This needs leadership in certain countries,” Scholz said, looking directly at U.S. Treasury Secretary Steven Mnuchin, sitting next to him at the seminar.
The taxing of digital firms and the effect of the coronavirus outbreak on the global economy are among the hot topics being debated by G20 financial leaders, from the world’s 20 largest economies, during their talks in Riyadh this weekend.
The OECD wants to set a minimum effective level at which such companies would be taxed and seeks agreement by the start of July, with an endorsement by the G20 by the end of the year.
“A coordinated answer is not the better way forward, but, given the alternatives, the only way forward,” OECD head Angel Gurria told the seminar.
A draft G20 communique, seen by Reuters, showed financial leaders will endorse the OECD approach to the issue in their final statement on Sunday, backing the need pay tax where business is conducted and the need for a minimum rate.
They will also “reaffirm commitment to reach a consensus based solution by end of 2020”.