US rejects French proposal on taxing tech companies

World
Europe

The US does not support a French proposal to tax the gross revenues of international tech corporations like Google and Amazon, Treasury Secretary Steven Mnuchin said on Saturday.

European authorities have targeted multinational companies that avoid taxation by seeking out cosy arrangements in low- and no-tax jurisdictions.

In September of this year, French authorities proposed that the European Union impose taxes on gross corporate revenues because they say they have been unable to tax corporate profits directly.

However, US had until recently shown little interest in discussing a joint solution, according to European officials.

Mnuchin said on Saturday he did not support this. "I think the concept of a gross revenue tax does not make sense and I don't think that's the right direction," he told reporters on the sidelines of the annual meetings of the World Bank and International Monetary Fund, but he said talks were continuing.

"We look forward to this discussion on international tax issues," he said.

"I think there's a general view from us and our allies. What we don't want is for the international companies to be going into tax havens to avoid taxes, no matter whether they're our companies or other countries."

The remarks come as European officials say Washington has softened in recent days on a point that has caused sharp transatlantic tensions in recent years.

Speaking at a separate news conference also on Satuday, French Finance Minister Bruno Le Maire said he was pleased that the US was open to discussing the matter.

"I return satisfied with the progress we've had from Washington on this subject," Le Maire said, noting that Washington and Paris had created a bilateral working group on the matter.

"It's the first time that France and the United States have agreed to advance the ways and means of taxing digital giants."

Le Maire said France's proposal might not be perfect but could be put in place quickly. "It is not an ideal proposal but it is a proposal that can be enforced in short order," he said.

The Obama administration in 2016 reacted angrily to European authorities' decision to collect more than 14 billion US dollars from Apple, which had negotiated highly favorable tax arrangements with Ireland.

Source(s): AFP