The United States, France, Spain, Austria, Italy and the United Kingdom announced on Thursday the extension of a provisional compromise on the taxation of digital giants, in the face of the delay in a more broad under the aegis of the OECD.
“Stakeholders decided to extend the political compromise set out in the joint declaration of October 21, 2021 until June 30, 2024,” it is written in a joint declaration by the six countries published Thursday.
Concretely, the five European states impose exceptional taxation on digital giants, often American, operating on their territory, through national legislation put in place before a major agreement was announced on October 8, 2021 with nearly 140 countries. signatories under the aegis of the Organization for Economic Co-operation and Development (OECD).
After this announcement, the five states agreed to withdraw their exceptional taxation from the moment the international agreement came into force, against the advice of the United States which wanted an immediate withdrawal of these national measures which penalized its businesses.
Two pillars
A compromise was found on October 21, 2021 between the six countries, providing that the five states would grant tax credits to companies once the major international tax agreement is in place, to the extent that national taxes exceeded the amount which companies were supposed to be fulfilled under the OECD agreement.
In exchange, the United States agreed not to impose punitive measures on these states.
The agreement negotiated by the OECD on October 8, 2021 provides for two pillars: the first on a better distribution of the taxation of multinationals where they carry out their activities and the second on a minimum taxation of 15%.
The second pillar was put in place on January 1 in many states, including the European Union, but an agreement on pillar 1 is still struggling to be endorsed by all the countries.