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After the G20 approves the tax deal, Italy says its digital tax could be kept for two more years

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WASHINGTON / ROME – G20 finance leaders approved a global tax deal on Wednesday calling for the removal of unilateral taxes on digital services, but Italy’s economy minister said it could take up to two years to remove the digital tax imposed by Rome. .

The timing of the removal of taxes on digital services aimed primarily at US tech platforms such as Google, Facebook Inc, Amazon.com Inc and Alphabet Inc.’s Apple Inc could become a new source of tension with Washington. after 136 countries agreed to renew international corporate taxes for the last time. week.

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Italian Economy Minister Daniele Franco said after chairing the G20 meeting that Rome would eliminate its digital tax by 2024 in accordance with the OECD agreement to impose a minimum corporate tax of 15% https: //www.reuters. com / business / finance / global- Corporate-Tax-deal-nears-holdouts-drop-objections-2021-10-08 and partially redistribute tax rights in large, highly profitable multinationals.

The agreement https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the- economy-october-2021.pdf anticipates implementation by the end of 2023 and immediately prohibits the imposition of new digital taxes, but does not specifically address the timing for the removal of existing digital levies. He notes that “transition arrangements are being discussed rapidly.”

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US officials have sought a faster removal of existing digital taxes after the deal.

Franco said that national digital taxes were always “suboptimal solutions” and that he expected other countries to take the same line as Italy by canceling them.

“We hope that the national unilateral taxes will be eliminated by 2024,” he told reporters at a press conference.

US Treasury officials said Monday they believed the talks on eliminating digital taxes would ultimately eliminate the need for the United States to apply retaliatory tariffs to countries that have imposed the levies, including Italy, France, and the United States. Great Britain, Spain, Austria, India and Turkey.

USTR has prepared the rates https://www.reuters.com/technology/us-sets-suspends-tariffs-six-countries-over-digital-taxes-2021-06-02, but immediately suspended them to allow negotiations on the comprehensive tax agreement. Suspensions expire November 28.

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Franco said Italy is currently collecting about 250 million euros ($ 290 million) annually in digital taxes, which are based on revenue from digital services sold in the country.

He said Italy would collect at least the same amount of revenue from the new tax deal, which allows market countries to tax duties on a 25% share of profits above a 10% margin based on local company sales. with more than $ 20 billion in revenue.

The deal was designed to capture tax revenue from America’s top tech companies, as well as other industries.

The Information Technology Industry Council, a trade group representing U.S. tech companies, said it welcomed the G20’s endorsement of the global tax deal, which contains a pledge not to impose new taxes. to digital services.

“With many unilateral tax measures still in place for digital services, we continue to call for their urgent withdrawal to provide much-needed certainty and predictability by businesses,” said the group’s chief executive, Jason Oxman, in a statement. ($ 1 = 0.8622 euros) (Information from David Lawder and Gavin Jones; Edited by Peter Cooney)

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