World tax plans targeting billionaires and multinational companies are stranded, the United States torpedits reforms under President Donald Trump.
The billionaire real estate tycoon withdrew the United States from an international agreement on the taxation of multinationals and has threatened prices on countries that target American technology giants.
Here is an overview of the playing state:
Large technological taxes
The countries have accused Amazon, Microsoft, the owner of Google Alphabet and the Facebook Meta parent company of contradicting local taxes.
Trump issued a warning on February 21 to countries that would reach major technologies and other American companies with fines or taxes that are “discriminatory, disproportionate” or designed to transfer funds to local businesses.
“My administration will act, imposing prices and taking the other reactive actions necessary to mitigate evil in the United States,” he said in memo.
This decision reopens a gap between Washington and its allies rather than taxing digital services.
During his first mandate, Trump threatened to slap prices on American imports of French champagne and cheese after France deployed a digital services tax in 2019.
Seven other countries have followed France’s advance since then.
The tax generated 780 million euros ($ 887 million) for the French government last year.
Now the European Union threatens to impose a tax on digital services if negotiations fail on Trump’s plans to impose 20% tariffs on EU.
Great Britain, which hopes to conclude a trade agreement with the United States, could reconsider its own digital tax, which currently reports 800 million pounds sterling per year.
British trade secretary Jonathan Reynolds said that the digital tax was not “something that can never change or we can never have a conversation”.
Global company tax
Nearly 140 countries have concluded an agreement in 2021 to tax multinational companies, an agreement negotiated under the auspices of the organization of economic cooperation and development.
The OECD agreement has two “pillars”.
The first provides for corporate taxation in countries where they make their profits, a decision to limit tax evasion. It mainly targets technological giants.
Pillar two, which set a minimum world rate of 15%, was adopted by around 60 economies, including Brazil, Great Britain, Canada, EU, Switzerland and Japan.
Daniel Bunn, head of tax Foundation, an American non -profit group, said that negotiations on the implementation of the first pillar “have been blocked for some time”, even under the presidency of Joe Biden.
Franco-American economist Gabriel Zucman said AFP that the reaction of the EU in the coming weeks “will be crucial”.
“If the EU and other countries abandon and allow American multinationals to practice, this will unfortunately spend the end of this very important agreement,” he said.
Tax the rich
Efforts to tax ultra-rich world are also blocked.
Brazil has used its time as president of the G20 to put pressure for a plan to impose a minimum tax of 2% at the net value of individuals with more than a billion dollars in assets, an estimated project to collect up to $ 250 billion per year.
The Biden administration has focused on the plan and it is unlikely to get a traction with Trump – a billionaire himself and a supporter of tax discounts – in the White House.
According to Forbes magazine, nearly a third of world billionaires are from the United States – more than China, India and Germany, according to Forbes magazine.
During a recent conference in Paris, French economist Thomas Piketty said the world could not wait for the G20 to all agree.
“We need individual countries to act as soon as they can,” he said.
“History suggests that once you have some countries that adopt a certain type of reform, especially powerful countries, it becomes a kind of new standard.”