Minister upbeat on talks with US about digital taxation

European Union – Digital taxation - Statement by M. Bruno Le Maire, Minister of the Economy and Finance, on his arrival at the Ecofin Council

Brussels, 21 January 2020

THE MINISTER – Good morning everyone.

First of all, I wish you all an excellent 2020; I haven’t had the opportunity to do so to journalists in Brussels.

Secondly, I wanted to say to you that we’re going to have a new discussion today about digital taxation. You’re aware of the French position. We’d like fair taxation of digital activities to be established as quickly as possible at international level. We’re currently having negotiations at the OECD, and we believe the OECD is the right framework for defining this digital taxation. We support all the OECD’s work relating to digital taxation and also to what’s called Pillar Two, minimum taxation, which is also very important for us.

President Emmanuel Macron and President Trump had a very constructive discussion on Sunday evening and agreed to avoid any escalation between the United States and France on this issue of digital taxation. I think that’s very good news.

For several weeks I’ve been negotiating with American Treasury Secretary Steven Mnuchin on an agreement, and we now have this agreement between the American and French Presidents about the need to avoid any tariff escalation and avoid any trade war, in which obviously there would be only losers, not just in the United States but also in France and Europe. I believe it’s a starting point, and a very positive starting point.

Yesterday I spoke again to my American counterpart, Steven Mnuchin, on the telephone. We’re continuing to work, our technical teams are in contact day and night to work on a solution to this digital taxation issue. I’ll be seeing Steven Mnuchin in Davos tomorrow to try and reach a definitive agreement. The negotiations are still difficult. On these taxation issues, the devil is in the detail; we still have to resolve a number of details. But I believe we’re moving in the right direction and Presidents Macron and Trump gave a significant boost to these negotiations between the United States and France, which have now been going on for several weeks.

Q. – What exactly does that mean? That France is going to withdraw its tax and wait for an OECD tax?

THE MINISTER – I’m not going to enter into the details of the negotiations, because if we want the tax to be a success I think it’s preferable for these negotiations to remain between Steven Mnuchin and myself and between our teams, rather than unveiling the whole negotiation from the outset. The shared aim is fair taxation of digital activities in an international framework. That’s what we want to achieve, and France has been very clear from the outset.

We’ve established a national tax because we believe rapid progress needs to be made. But our strategic goal has always been to overhaul 21st-century taxation, both through taxation of digital activities – because no one can agree to people in the digital sector not paying the same level of tax as those in other economic activities – and through minimum taxation, because we categorically refuse to allow tax avoidance in tax havens, with corporation tax rates that are too low.

This goal of overhauling international taxation in the 21st century is still a French goal. And it’s a goal that is shared with our American allies. So given that we have the same goal, all that remains is to build the road leading us to that goal – I hope by the end of 2020, because we mustn’t waste too much time. Steven Mnuchin and I are currently trying to build that road.

I think it’s very significant that Presidents Trump and Macron have set out the framework – no trade war between the United States and France; it’s now up to us to resolve all these details and build the road during 2020 that leads us to fair taxation of digital activities and minimum taxation at international level. Thank you./.

Published on 21/01/2020

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