An opportunity that we cannot miss

Image of an Amazon fulfillment center in Darlington, UK, last September.LEE SMITH / Reuters

For more than four years, France, Germany, Italy and Spain have worked together to create an international tax system adapted to the 21st century.

In this time, there have been many tug of war.

It is time to reach an agreement.

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• Editorial |

  Global tax pact

The implementation of this fairer and more efficient international tax system was already a priority before the current economic crisis, and it will be even more so when we emerge from it.

Why?

First, because the crisis has favored large digital companies, whose profits have soared to levels not seen in other sectors of the economy.

So why don't the most profitable companies pay a fair tax rate?

The fact that they operate on the internet does not mean that they do not have to pay taxes in those countries in which they are present and in which their profits are generated.

Historically, physical presence has been the foundation of our tax system.

This base has to adapt as our economy moves towards the internet.

These companies, like the others, have to pay fair taxes, consistent with their success, to finance public goods.

Second, because the crisis has accentuated inequalities.

It is urgent to put in place an efficient and fair international tax system.

Currently, multinationals can avoid corporate tax by shifting their profits to other countries, and that is something that public opinion will not continue to accept.

The

dumping

tax may not be an option in Europe or any country of the world.

This practice would only lead to an even greater drop in corporate tax collection, more inequality, and the inability to finance basic public services.

Third, because we need to regain international consensus on major global issues.

The OECD, with the support of our countries, has been doing exceptional work in the field of international taxation for many years.

The OECD has put balanced proposals on the table on both issues: the income tax of the most profitable multinationals, especially the digital giants (Pillar I) and the minimum tax (Pillar II).

We can continue to advance in this line.

For the first time in decades, we are presented with the opportunity to achieve a historic agreement for a new international tax system that includes all the countries of the world.

A multilateral agreement in this regard would indicate a commitment to work together on issues of greatest global significance.

With the new Biden administration there is no longer the threat of a veto to this new international tax system.

The new US proposal on a global minimum corporate tax is an important step that goes in the same direction as the one initially proposed by our countries and later led by the OECD.

Committing to a minimum effective rate of at least 15% is a good starting point.

For this reason, we pledge to establish a common position on a new international tax system at the G-7 summit of finance and economy ministers to be held this Friday in London.

We are confident that this will give us the necessary impetus to achieve a global agreement at the G-20 summit that will take place in Venice in July.

We can do it.

Let's make it happen.

We owe it to our citizens.

Nadia Calviño

is Vice President and Minister of Economic Affairs and Digital Transformation;

Daniele Franco

, Minister of Economy and Finance of Italy;

Bruno Le Maire,

Minister of Economy, Finance and Recovery of France, and

Olaf Scholz

, Vice Chancellor and Minister of Finance of Germany.