ZD Tech: 1,460 days of negotiations for a global tax on GAFAM

Hello everyone and welcome to this new issue of ZDTech, ‘s editorial podcast.

My name is Clarisse treilles and today I will explain why it took no less than four years to agree on a global GAFAM tax.

1,460! It is therefore the number of days of negotiations that will have been necessary to seal an agreement on this burning issue.

Last weekend, 136 OECD countries agreed to this comprehensive tax reform.

Minimum tax rate

The agreement establishes, on the one hand, a minimum tax rate of 15% for companies whose turnover exceeds 750 million euros.

On the other hand, this agreement will also allow the reallocation of part of the taxes collected to multinationals. The idea is to better distribute the extraordinary tax profits between the countries where these companies are located and those that are mere markets for Google, Amazon and other Facebook.

Because here we are talking about digital giants, whose turnover exceeds 20,000 million euros, and the profitability is higher than 10%. 25% of your surplus earnings will be taxed and distributed among different countries.

Four years for that?

Yes, because the diplomatic game has taken a long time to harmonize the divergent interests of the opposing forces.

On the one hand, mainly the United States, where GAFAM is based, for Google, Amazon, Facebook, Apple and Microsoft. On the other hand, the countries that host the affiliates of these groups, often with advantageous tax policies. Like Ireland, for example.

It was not easy to convince Ireland to adopt a minimum tax rate of 15%. But the Irish government finally agreed to lower its rate to 12.5%. A decisive change for the success of the negotiations.

In France, (almost) nothing changes

For France, that is not going to change much, in theory. Because Bercy has already been practicing a hexagonal GAFA TAX for three years. His loot amounts to almost 350 million euros a year. This national tax should now disappear in favor of the new global tax system.

If France has fought hard for this agreement to be successful, it is because it is one of the countries whose fiscal rules until then had been circumvented by GAFAM to optimize its income. The new tax could increase global tax revenue by $ 125 billion to $ 150 billion per year.

With the condition that the countries sign a convention to ratify the current agreement in 2022, and translate it into their respective legislation …

If all goes well, the implementation of the agreement is scheduled for 2023. But Bruno Le Maire already speaks, and I quote, of “the fiscal revolution of the 21st century”.

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