Treasury Secretary Janet Yellen said Friday that regulators agreed to remove a controversial part of the US government’s plan to reform global digital tax rules, paving the way for a faster deal.
What happens: Yellen told G20 finance ministers that the US will give up a “safe haven” for which the Trump administration is fighting, which would have essentially allowed technology companies to give up any new tax regime, reports FT.
Why does it matter: He points out that Washington is ready to make progress on an international digital tax agreement, which the Trump administration has not accomplished.
Context: Countries around the world, including France, have tried to set digital taxes, which are usually aimed at US tech giants who make money from international users.
- The effort has also grown in the United States – Maryland has just become the first state to adopt a digital advertising tax.
- The business and technology communities sought to see how the Biden administration would address this issue. The process is moving slowly and European countries have been eager to move forward with their tariffs.
What are they saying: Technology companies want a global digital taxation agreement, arguing that they are happy to pay their tariff quota, but that it should be uniform.
- “As the global economy seeks to recover from the global pandemic and governments face new fiscal pressures, an agreed solution is now needed more than ever to ensure a sustainable framework for cross-border trade and investment,” Google’s vice president told business and public policy Karan Bhatia wrote in a blog post on Thursday.
What’s next: Countries will continue to try to reach an agreement at the Organization for Economic Co-operation and Development, where negotiations have taken place.