Google tax Spanish countdown comes into force: OECD assumes no deal until mid-2021 and France demands EU to set " example".
The BOE published this Friday the new tax on certain digital services. In a nutshell: the Google rate.
The new rule contemplates its entry into force 3 months after it is published, so it is expected that Spain will begin to tax 3% of various revenues of technological multinationals for their activities in the country from January 16.
But, despite the fact that the legal instrument already exists, everything is in the air.
Earlier this week the OECD concluded that there would be no global consensus on this new tax until at least mid-2021. If the deadlines were to be hurried, the new Spanish tax would come into force, at least, 3 months earlier.
France has approved its tax on digital services— known as the GAFA tax, by the acronym of Google, Apple, Facebook and Amazon-since the end of last year. However, it has not begun to be implemented, at the expense of how negotiations unfold at the global level.
And at the expense, too, of Trump's threats.
Some French media editorials, such as Le Monde, are calling on Macron's government not to embark solely on a trade war with the United States for which it does not have Media. Wait for Europe.
Google tax Spanish countdown
French Finance Minister Bruno Le Maire recently called for the European Union to urgently adopt a digital tax for big tech companies. "Either another extension of months, perhaps years, is accepted, or taxes on digital activities are considered urgent and in this case Europe sets an example."
"We consider it essential that Europe set an example and adopt a digital tax as soon as possible," he said, in a statement collected by Reuters.
No agreement, at the moment, on a global level. At the beginning of this 2020 the 137 countries that make up the OECD agreed, ironically, to agree. The European Commission had threatened to explore its own tax just a few days earlier. It also did so in August and last month.
Finally, in mid-October the negotiation ran aground. Although initially the agreement was to be reached at the end of this 2020, the OECD recognized just a few days ago that not, that finally the agreement will be taken well into 2021.
The next moves to wait are those of the European Commission itself, now that the OECD has ratified its delay, and now that France urges the community institutions not to wait any longer.
The OECD itself wonders what will happen to countries such as the United Kingdom, France or Spain, which hope to start collecting this new tax. In the case of the Government of Pedro Sánchez, starting next January.
"The absence of a non-consensual solution could cause taxes on digital services to arise unilaterally, which would increase harmful rates and trade wars, undermining certainty and investment," the organization itself echoed CNBC in a statement.
"Under the worst-case scenario —a trade war triggered by digital taxes around the world-failure to reach a deal could reduce global GDP by 1% each year," he said.
Within this framework, the European authorities are already working on a community standard, the Digital Services Act. The Financial Times pointed out last week how the European Commission would be creating a list of big 20 technology corporations that will have to comply with regulations more thorough than the rest of the companies of the Old Continent.
The European Commissioner for Competition, Margrethe Vestager, defended in an interview in the newspaper El País that the members of this list will be companies "according to their characteristics", and will be part of the list by them, "not by the place of their headquarters".
"It may be an old European custom, but here when you grow in size and power, your responsibilities also increase," he said.
Spain has already moved tab. It is now to be hoped that the European Union and the OECD will do so. Negotiations were strained at the beginning of the summer, to the point that US Treasury Secretary Steve Mnuchin threatened countries to implement the tax with "consequences".
The move by the Trump administration provoked a diplomatic response from several finance and finance ministers of the aforementioned countries, among which was the Minister Spokesperson of the Government of Spain, María Jesús Montero.
Within Spain, the Google rate has also had detractors. Adigital, Spanish employer of the digital economy, regretted in a press release the approval of a tax of this type unilaterally.
"Tax measures of this type adopted in the past have shown to generate strong legal uncertainty for citizens, companies and investors; also raising serious doubts about their impact in terms of collection," they denounced.
Adigital again referred to a report prepared by the consultancy PwC, adigital itself and AMETIC, in which it warned that the tax would cause an impact of up to 665 million euros on Spanish consumers, now that digital companies would update rates for the use of their services.
According to the same document, the Spanish companies of these digital services now taxed would see their profits reduced "between 450 and 562 million euros".
For Adigital, the tax " splits the European Single Market and the Digital Single Market "and assures that it will represent"a clear obstacle for our country's participation in the international debate".
Google tax Spanish countdown