Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

OECD chief sees global digital tax deal pushed back to 2024

Economy May 24, 2022 12:13PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: OECD's incoming Secretary-General and former Australian Finance Minister Mathias Cormann delivers a speech at a handover ceremony during which he takes on the role of Secretary-General of the Organisation for Economic Co-operation and Developm

By Dan Burns

DAVOS, Switzerland (Reuters) - The Organisation for Economic Cooperation and Development (OECD) on Tuesday acknowledged for the first time that a global digital tax deal may take a year longer to implement.

The deal, which the OECD had hoped to sign off on in the middle of this year, would give other countries a bigger share of the tax take on the earnings of big U.S. digital groups such as Apple Inc (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) Inc's Google.

It is the first of two pillars of the biggest overhaul of cross-border tax rules in a generation. Both pillars were originally intended to be implemented in 2023. The overhaul also includes plans for a global minimum corporate tax of 15% on big multinationals.

OECD Secretary-General Mathias Cormann told a panel at the World Economic Forum in Davos, Switzerland, that progress on ironing out technical details on the digital tax deal was going less quickly than planned.

"We deliberately set a very ambitious timeline for implementation initially to keep the pressure on ... but I suspect that it's probably most likely that we'll end up with a practical implementation from 2024 onwards," he said.

Meanwhile, the Biden administration and the European Union are struggling to pass legislation implementing the global minimum tax deal agreed last October by nearly 140 countries.

Cormann said it was "manifestly" in the interest of the United States to join the deal and said he was "quietly optimistic" a compromise would be presented in the EU that all members could back.

French Finance Minister Bruno Le Maire, whose country holds the European Union's rotating presidency until end June, said on Tuesday he was confident EU finance ministers would unanimously back the global minimum tax next month.

Approval by the EU has been held up by objections from Poland, which vetoed a compromise in April to launch the 137-country deal within the EU.

U.S. approval, meanwhile, has been stalled in Congress, and Cormann was asked if prospects for U.S. ratification would be scuppered should Republicans who broadly oppose the deal win majorities in the House of Representatives and Senate in November's midterm elections.

The deal could be implemented by other countries even if U.S. legislators decline to sign on, and Cormann argued that would put U.S. multinational businesses at a disadvantage.

"I can't imagine that any country ... would make a judgment that would put themselves at that sort of disadvantage," Cormann said. "I believe that irrespective of who's in the majority in Congress ... this is manifestly in the U.S. interest."

Congress would need to approve changes to the current 10.5% U.S. global overseas minimum tax known as "GILTI," raising the rate to 15% and converting it to a country-by-country system.

The changes were initially included in U.S. President Joe Biden's sweeping social and climate bill, which stalled last year after objections from centrist Senate Democrats.

But prospects for a slimmed-down spending package with the tax changes look increasingly difficult as midterm congressional elections approach and as lawmakers voice concerns about more spending amid high inflation.

OECD chief sees global digital tax deal pushed back to 2024
 

Related Articles

China to send troops to Russia for 'Vostok' exercise
China to send troops to Russia for 'Vostok' exercise By Reuters - Aug 17, 2022

BEIJING (Reuters) - Chinese troops will travel to Russia to take part in joint military exercises led by the host and including India, Belarus, Mongolia, Tajikistan and other...

UK inflation to hit 15% in early 2023, Citi predicts
UK inflation to hit 15% in early 2023, Citi predicts By Reuters - Aug 17, 2022

LONDON (Reuters) - British consumer price inflation is likely to peak at an annual rate above 15% in the first three months of next year unless there are government measures to...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email