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MNI POLICY:OECD Official:G20 Must Push e-Tax or Face Trade War

By Brooke Migdon
     WASHINGTON (MNI) - The OECD will work to advance digital tax guidelines at
a G20 meeting this weekend, a senior official told MNI Friday, warning an
impasse could stoke trade tensions.
     "No one wants to see the alternative," Grace Perez-Navarro, a deputy
director of tax policy, said Friday in an email. "A slew of unilateral,
uncoordinated digital services taxes and the trade war that would ensue."
     Leaders are convening in Saudi Arabia and one panel focused on tax and
digitalization is expected to include U.S. Treasury Secretary Steven Mnuchin and
French Finance Minister Bruno Le Maire. France shelved plans to collect a tax on
digital services earlier this year until a larger solution is reached at the
OECD. The U.S. has threatened to punish other nations like the U.K. if they tax
American tech giants.
     Perez-Navarro said "thorny issues" like copycat digital taxes and U.S.
demand for a "safe harbor" provision that would allow corporations to opt out of
proposed reforms make reaching consensus difficult.
     "We expect the G20 to continue to support the process and confirm their
commitment to reaching a solution by year end," Perez-Navarro said. "The whole
project is challenging but we must still reach consensus no later than
     Then-Treasury chief Sajid Javid said last month that the U.K. would
continue to pursue a 2% tax on the annual revenue of large tech companies
despite U.S. threats of automobile tariffs. His new successor Rishi Sunak will
be absent from the G20. 
     Perez-Navarro said political pressure is forcing action in some countries,
which have been waiting on an OECD solution since the project to overhaul the
international tax system began in 2013. "For some, 'wait-and-see' is no longer
an option," she said.
--MNI Washington Bureau; +1 202 371 2121; email:
[TOPICS: M$E$$$,M$U$$$,M$X$$$,MI$$$$,MGU$$$,MGX$$$]

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