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1ST LEAD Germany to seek tighter taxation of digital companies at G20 meeting By Georg Ismar, dpa

By our dpa-correspondent and Europe Online    auf Facebook posten  Auf Twitter posten  
Buenos Aires (dpa) - Germany will seek joint G20 action to tighten the taxation of digital companies at a meeting of the group of 20 major economies in Buenos Aires, Finance Minister Olaf Scholz said.

Scholz, who is also the vice chancellor of Germany, spoke to dpa before the meeting, which will bring together finance ministers and central bankers from 19 countries and the European Union in the Argentinian capital on Monday.

European countries such as Germany and France are concerned about tax avoidance by online companies, such as Google or Facebook, which do not need to be physically present in countries where they operate.

The European Commission is now planning to impose a 3-per-cent tax on the revenues of large digital companies, which would raise an estimated 5 billion euros (6 billion dollars) annually.

"The international community must find answers to the challenges of digitalization. The taxing of the digital economy is part of it," Scholz said.

"It presents complicated tax law questions which we will have to thoroughly discuss in the coming weeks and months," he added.

A report that the Organization for Economic Cooperation and Development (OECD) will present in Buenos Aires, as well as proposals the European Commission is expected to make, "offer a good basis for further talks," the minister said.

Ireland, which has offered tax incentives to digital companies, is expected oppose stringent regulations. Scholz stressed the need to coordinate measures "as broadly as possible" on the international level.

"It is in the common interest of the EU countries to avoid unilateralism and to seek a united position," he said.

France, which backs Germany on the need to prevent tax avoidance by digital companies, is "hoping for an agreed, consensual solution for realigning international regulations," according to Economy Ministry sources in Paris.

Countries such as the United States may not agree, "but there is also growing political pressure, a public sense of injustice," the sources said, calling on concerned states to take action "in a coordinated way."

The G20 meeting will also discuss the threat of trade wars after US President Donald Trump announced plans to raise steel and aluminium tariffs. Scholz said he would "make it clear" in Buenos Aires that "protectionism is an invention of the 19th century."

"It should not be a political means to react to the challenges of the 21st century," he added.

Sources from the French Economy Ministry stressed the need for a united European position, adding that France does not want "an increase in tension."

"There will be negotiations, we don‘t know how they are going to go, but we all feel that Europe will be exempted," the sources said.


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