Global tax talks race to resolve hurdles as time runs out: Report
The 140 countries attempting to conclude years of negotiations to
overhaul global tax rules for an increasingly digitized economy are racing to
resolve key details against a ticking clock.
With just over a week until an Oct. 8 meeting of all the
governments involved, negotiators are still wrestling over parameters of
setting a global minimum corporate tax and sharing the spoils from levies on
tech giants like Facebook Inc. and Alphabet Inc.’s Google, according to people
familiar with the matter.
They are also trying to work out how the global deal will
coordinate countries on halting new unilateral digital taxes and unwinding
existing measures -- a hot-button issue for governments seeking to protect
revenues, and for the U.S., which sees such levies as discriminatory against
its firms.
Hanging over the talks is uncertainty over whether the U.S. could
actually make good on any kind of agreement after a leading Republican senator,
Patrick Toomey, said this week that Congress probably would block ratification.
Taken together, the hurdles threaten the goal of the Biden
administration and the Group of 20 advanced economies to end a revenue-eroding
race to the bottom of offering ever-lower taxes to lure business investment.
The changes to global levies are a key piece of Biden tax proposals to help pay
for trillions of dollars in social spending.
And more broadly, the Organization for Economic Cooperation and
Development, which is attempting to broker a deal, has warned failure would
lead to a cocktail of unilateral digital levies and trade and tax disputes that
could strip more than 1% off global economic output annually.
In the run-up to the Oct. 8 meeting of all the countries involved,
Group of Seven finance ministers,
who have shaped the talks at key moments, met Wednesday on a conference call.
The U.K., which currently chairs the group, said there was “a common
understanding” on some important issues and a commitment to implementation. But
nations stopped short of specifying positions on the headline numbers that will
shape the deal.
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