Biden should clarify US position on digital tax within two months, France says

FILE PHOTO: EU flags flutter outside the EU Commission headquarters in Brussels

PARIS (Reuters) – The European Union hopes Joseph Biden’s incoming administration will clarify the U.S. position on digital taxation within two months of taking office, a French Finance Ministry source said on Monday.

The EU is considering going ahead with a bloc-wide tax on digital services offered by companies such as Google and Amazon if a global deal to rewrite rules for cross-border taxation is not reached by mid 2021.

Efforts at the Organisation for Economic Cooperation and Development (OECD) to update the rules for the era of digital commerce stalled this year. Donald Trump’s administration balked at the prospect of signing up to a multilateral deal shortly before the presidential election.

EU heads of state and government are due to take a look at the situation in March and decide what course of action the bloc should take, the French Finance Ministry source 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,” the source said.

“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,” the source added.

France is pushing its EU partners to prepare an EU digital tax in early 2021 that could be quickly applied in case the talks at the OECD fail again by mid year.

Paris has its own national digital tax, but has pledged to scrap it as soon as there is an international deal. It suspended the levy this year until December while negotiations at the OECD were under way.

(Reporting by Leigh Thomas, editing by Larry King)