Efforts to establish a coordinate global tax The regime for technology giants and ultra-rich individuals collapse, such as US President Donald Asset retire support and threatens new prices. This decision has reopened transatlantic tensions and project uncertainty over the years of negotiations aimed at braking tax Avoiding and closing of the escapes exploited by multinationals.
Technological tax standoff
On February 21, Trump issued an official memo warning that his administration would ride against any country imposing taxes or fines on American technological companies which are “discriminatory, disproportionate” or intended to transfer income to local businesses. He specifically threatened prices and other commercial measures to protect US companies.
This echoes a dispute from his first mandate, when Trump threatened to impose prices on French wine and cheese after France has set up a tax on digital services in 2019 targeting American companies. Since then, at least additional countries have adopted similar taxes, notably Italy, Spain, Austria and India.
France has collected 780 million euros in the tax in 2023. The European Union now plans to a digital tax on a block level if negotiations with the United States fail, in particular in the light of Trump’s proposal to impose 20% tariffs on EU products.
Great Britain, which currently collects around 800 million pounds sterling per year from its digital tax, seems open to revise politics. British trade secretary Jonathan Reynolds recently declared that the tax was not “established” and could be subject to negotiation because London was asking for a trade agreement with Washington.
Global Corporate Tax de-Shall Stands
In 2021, nearly 140 countries concluded an agreement under the OECD to reform the international corporate tax. The plan has two pillars. The first aims to tax the benefits where they are generated, in particular to target digital companies. The second establishes a global rate of taxation of companies of 15%.
So far, around sixty countries have adopted the minimum tax, including Brazil, Japan, Canada, Switzerland and all EU members. However, the first pillar, considered the heart of the effort to prevent the change in profit and the database, has made no significant progress. Daniel Bunn, of the American Foundation tax, said that the talks on the implementation had been blocked even under President Joe Biden.
Franco-American economist Gabriel Zucman warned that without application, the agreement could collapse. “If the EU and other countries abandon and allow American multinationals to practice, this will unfortunately spend the end of this very important agreement,” he told AFP.
Push to tax the billionaire class hits the road dam
A separate push to impose a tax on wealth on billionaires is also to lose momentum. Brazil, during its G20 presidency, proposed a minimum annual tax of two percent on people with more than a billion dollars in assets. Politics, if implemented worldwide, was to generate $ 250 billion a year.
The United States has not supported the proposal. Biden remained silent, and Trump – himself a billionaire – defended tax reductions throughout his political career. With Trump again in the White House, observers are not very likely to support us.
The United States is home to nearly a third of world billionaires – more than China, India and Germany, according to Forbes.
During a recent tax conference in Paris, economist Thomas Piketty said that countries should act independently in the event of failure of multilateral coordination. “We need individual countries to act as soon as they can,” he said. “History suggests that once a few countries adopt a reform, it becomes a new standard.”
