Briefing

EU warns it may tax tech giants even without a global deal

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The EU “should be willing to act alone” by 2020 even if there’s no global agreement on digital tax reform, said Margrethe Vestager, the commission’s incoming vice-president, who will be in charge of digital policy and competition for the bloc. Paolo Gentiloni, Europe’s commissioner-designate for taxation, said he would try to keep individual EU countries from vetoing such a move. (Reuters)

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Talking point: The warning comes after France became the first EU member to impose a digital levy on foreign digital companies’ revenues. France went ahead with the tax despite threats of retaliation from the U.S., where President Donald Trump argued it unfairly targeted U.S. firms—a sentiment echoed by the heads of Google and Amazon—and threatened to slap a duty on French wine. The two countries have since reached a compromise, and in August, they pledged to take leading roles in an OECD task force that is expected to propose a global framework for taxing companies that generate revenue in a nation without having a physical presence there. In March, European finance ministers scrapped a plan for an EU-wide digital tax following objections from a handful of member states—including Ireland and Scandinavian countries—that preferred to work towards an international consensus. The comments from Vestager and Gentiloni suggest Europe will keep the pressure on the U.S. for an agreement.