The digital giants are the big winners of the pandemic Everyone does their shopping on the internet, watches their films. It has become the biggest supermarket in the world, the biggest cinema too. A virtual world where the inhabitants of the planet meet, because they cannot leave their homes or go on vacation. A virtual world with very real profits. And yet the most emblematic companies of the Net are not taxed at the height of their profits.
The new Biden administration made proposals this week with the idea of a global minimum corporate tax of 21%, as well as a tax on large globalized companies, and therefore on the winners of the system. Because today, as Pascal St Amans, director of the OECD’s Center for Tax Policy and Administration, points out,organization of economic cooperation and development, a hundred companies alone account for half of the profit made globally, and a majority of them are American.
How to tax them? This is the subject of ongoing discussions within the OECD. The US proposal suggests favoring a country-based approach, rather than a sectoral approach, which would undoubtedly lead to new tax avoidance, optimization and evasion techniques on the part of GAFAs. This proposal from the United States is interesting, according to Pascal St Amans. Now we need to study it, says French Economy Minister Bruno Le Maire, who calls for a global tax revolution.
For the calendar, you have to go quickly, very quickly. The firing window is both unexpected and extremely short. At the OECD, we hope to strike a deal this summer, as the stars are aligned, with a new US presidency that has decided that the digital giants will finally pay their shares. In Europe, there is an urgent need to put money into state coffers to finance expenses related to the pandemic. France, a pioneer on this issue, has its own electoral deadlines next year.
And if a global agreement is quickly reached under the aegis of the OECD, this will allow France to abandon its tax on digital services which has several drawbacks. From a technical point of view, it excludes several digital giants, and financially its revenues are meager, less than 400 million euros in 2019, when at the same time the corporate tax brought in 31 billion euros in total.