France has made proposals to the United States to resolve the dispute over taxing multinational tech giants that aims to seal the framework for a global deal by the end of the month, French finance minister Bruno Le Maire said on Friday.
‘There are possibilities available, we are working with (US treasury secretary) Steven Mnuchin. I made several proposals to him,’ Le Maire said days before self-imposed deadline to find a resolution expires.
On January 7, Paris and Washington set a two-week deadline to end a row over a French tax on multinational tech giants, with a US threat of sky-high retaliatory duties on $2.4 billion of French products from wines to leather handbags still hanging in the air.
Le Maire declined to unveil details about the proposals or whether France had made a gesture on the implementation of the tax that would hit US firms like Netflix and Amazon.
‘We are going to keep that to ourselves for the moment, but I think there is a path to a possible compromise between the United States and France on the issue which would permit both to advance towards the only reasonable solution: an international solution via the OECD,’ he added.
The deadline coincides with a scheduled meeting on the topic at the World Economic Forum meeting in Davos from January 21 to 24.
France last year approved a levy on tech firms as international efforts dragged on to find a new model for taxing companies who operate mostly over the internet. Currently, they often pay little tax to countries in which they are not physically present even though they earn lots of revenue in them via online sales and advertising.
The levy would see them paying up to 3 per cent of revenues earned in France.
Washington says that US companies such as Google, Apple, Facebook, Netflix and Amazon have been singled out by the French tax, and threatened duties of up to 100 per cent of the value of French imports of such emblematic goods as Champagne and Camembert cheese.
After blocking the tech tax talks at the Organisation for Economic Cooperation and Development (OECD) for several years, Washington re-launched them last year only to make proposals in December which France rejected before going ahead with its tax.
Le Maire suggested that a resolution of the issue could progress in stages, with the first being a framework agreement on the basis of the text worked out at the OECD.
If Washington agrees, the agreement in principle could be approved by OECD members at the end of the month, said the French minister, speaking alongside the director of the OECD, Angel Gurria.
Then details about the parameters of the tax could be thrashed out until June, with an implementation of the tax soon thereafter, said Le Maire.
He said this was one possible way to end the dispute, and added that France would keep its tax in place until an international levy is agreed.
Gurria called the Davos meeting an opportunity to move forward on the issue and said that the OECD, which has helped countries try to find common ground, doesn’t have a plan B if talks based on the current text fail.
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