The European Union is anticipating a United States decision based on digital tax matters that are yet to be settled. The French ministry of Finance is expecting the administration of the new US president-elect Joseph Biden to be ready to elucidate the stance of his country immediately after he is sworn in.
This is coming from an anonymous informer (stoolpigeon) within the French finance ministry, the informer stated that the US government is given the grace of two months to come up with a verdict on the European digital taxation policies.
Last week, the French finance ministry notified all the tech companies to resume its digital tax payment as from December 2020, and tech companies at home and abroad are willing to comply with the French government.
Initially, tax payment in Europe was paused with the intent to overhaul its policies for French companies accountable for cross-border tax payment.
By 2021, the EU is expected to have finalised plans on amending its global tax policies imposed on tech companies such as Google, Facebook, Amazon and Apple among others, but this process happens to be slightly delayed because countries like the United States is still yet to sign the multilateral deal that issues commencement of such program.
The delay by the US government turns out not to be intentional as some had expected the Trump administration to state their stand on the plan before the elections but then the election happened and he lost and since then, the American media reports that President Trump is now a “lame duck” President who can’t get things done politically.
The Organization for Economic Cooperation and Development (OECD), is expected to have updated it polices based on the advancements of e-commerce that needs to be regulated. The OECD is still yet to successfully conclude the modification of its digital policies.
The “stoolpigeon” within the French ministry said that the heads of states under the EU and the EU council itself are highly expecting results by the March of 2021 or the union will be left with no choice but to continue the policy amendment without the US government.
The stoolpigeon said “Obviously, March was not chosen by chance. March will be two months after Biden takes office … We hope to have contacts within these two months with the new American administration. Depending on what the Biden administration says, the European Council – it’s at the level of EU heads of state and government – will give guidelines in March.”
Since tax payment has been halted, the progress to actualising a modified tax policy has not been fruitful overtime. In contrast, the French government is urging its colleagues within the EU to be hasty in formulating the EU tax policies before March 2021 so that the Union will have a reason not to depend on the OECD. It looks like France is expecting the OECD to be less fecund on the matter, again.
The French proposed digital tax a three percent tax addition to what companies usually pay, the reason why the Trump administration baulked on sighing the multilateral deal that required US companies to pay a higher tax in Europe.
Still, France said they would scrap its tax policies once there has been an international verdict on tax policies. That said, the French government is still anticipating the digital tax collection by next month.