Let’s come together to tax tech giants, say G20 officials eyeing $100 bln boost

FILE PHOTO: Facebook and Twitter logos are seen on a shop window in Malaga, Spain, June 4, 2018. (REUTERS)
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Updated 23 February 2020

Let’s come together to tax tech giants, say G20 officials eyeing $100 bln boost

  • OECD says this could boost national tax revenues by a total of $100 billion a year
  • Financial leaders, from the world’s 20 largest economies, talks in Riyadh this weekend

RIYADH: Leading world economies must show unity in dealing with aggressive “tax optimization” by global digital giants like Google, Amazon and Facebook, G20 officials said on Saturday.
The Organization for Economic Cooperation and Development (OECD) is developing global rules by to make digital companies pay tax where they do business, rather than where they register subsidiaries. The OECD says this could boost national tax revenues by a total of $100 billion a year.
The call for unity appeared directed mainly at the United States, home to the biggest tech companies, in an attempt to head off any stalling on the rules until after the US presidential election in November.
“There is no time to wait for elections,” German Finance Minister Olaf Scholz told a tax seminar on the sidelines of a meeting of G20 finance ministers and central bankers.
“This needs leadership in certain countries,” Scholz said, looking directly at US Treasury Secretary Steven Mnuchin, sitting next to him at the seminar.
The taxing of digital firms and the effect of the coronavirus outbreak on the global economy are among the hot topics being debated by G20 financial leaders, from the world’s 20 largest economies, during their talks in Riyadh this weekend.
The OECD wants to set a minimum effective level at which such companies would be taxed and seeks agreement by the start of July, with an endorsement by the G20 by the end of the year.
“A coordinated answer is not the better way forward, but, given the alternatives, the only way forward,” OECD head Angel Gurria told the seminar.
A draft G20 communique, seen by Reuters, showed financial leaders will endorse the OECD approach to the issue in their final statement on Sunday, backing the need pay tax where business is conducted and the need for a minimum rate.
They will also “reaffirm committment to reach a consensus based solution by end of 2020.”
The OECD efforts were stalled late last year by last-minute changes demanded by Washington, which many G20 officials view as reluctant to deal with a potentially politically tricky matter before the presidential election.
Mnuchin said OECD countries were close to an agreement on the minimum tax level, which he said would also go a long way to resolving the issue of where tax is paid, although he warned that some aspects of the tax proposal could require approval by the US Congress.
“I think we all want to get this done by the end of the year, and that’s the objective,” Mnuchin told the seminar.
Mnuchin sought to reassure G20 delegates that a US proposal to add a “safe harbor” regime to the tax reform effort — which has drawn criticism from France and other countries — would not let companies simply opt out of paying taxes.
“It’s not an optional tax,” he said. “You pay the safe harbor as opposed to paying something else. People may pay a little bit more in a safe harbor knowing they have tax certainty.”
US officials say their proposal would help address lawmakers concerns and smooth passage of legislation that might be required for US implementation of new global tax rules. In essence, they argue, it would allow a multinational enterprise to elect to pay more foreign tax in exchange for better terms in the event of disputes over taxes, and easier administrative procedures.
But many questions remain.

MORE CLARITY NEEDED
French Finance Minster Bruno Le Maire told reporters it remained unclear exactly what the US proposal would entail.
“We’re still in the process of assessing what it really means,” he said, adding, “It’s not a non-starter for the French government. It’s fair and useful to give all the attention to this new proposal.”
European Union Economy Commissioner Paolo Gentiloni told Reuters there was still hard work ahead.
“It’s good that there is a commitment to find a solution, but ... it’s not there,” he said, adding that he would meet with Mnuchin for bilateral talks later Saturday.
Scholz told reporters Germany remained skeptical. “I think we shouldn’t start with letting companies choose which taxes they want to pay. This is leading to nowhere,” he said.
Several European countries, including France, Spain, Austria, Italy, Britain and Hungary either already have a plan for a digital tax or are working on one, creating the risk of a highly fragmented global system.
“You cannot have in a global economy different national tax systems that conflict with each other,” Mnuchin said.
Facebook Chief Executive Mark Zuckerberg said on Feb. 14 he would be ready to pay more tax in Europe and would welcome a global OECD solution that would make the levies uniform.


Tiger at NYC’s Bronx Zoo tests positive for coronavirus

Updated 10 min 9 sec ago

Tiger at NYC’s Bronx Zoo tests positive for coronavirus

  • It is the first known infection in an animal in the US or a tiger anywhere
  • Six other tigers and lions that have also fallen ill are believed to have been infected by a zoo employee

NEW YORK: A tiger at the Bronx Zoo has tested positive for the new coronavirus, in what is believed to be the first known infection in an animal in the US or a tiger anywhere, federal officials and the zoo said Sunday.
The 4-year-old Malayan tiger named Nadia, and six other tigers and lions that have also fallen ill, are believed to have been infected by a zoo employee who wasn’t yet showing symptoms, the zoo said. The first animal started showing symptoms March 27, and all are doing well and expected to recover, said the zoo, which has been closed to the public since March 16 amid the surging coronavirus outbreak in New York.
“We tested the cat out of an abundance of caution” and aim to “contribute to the world’s continuing understanding of this novel coronavirus,” said Dr. Paul Calle, the zoo’s chief veterinarian.
The finding raises new questions about transmission of the virus in animals. The US Department of Agriculture, which confirmed Nadia’s test result at its veterinary lab, says there are no known cases of the virus in US pets or livestock.
“There doesn’t appear to be, at this time, any evidence that suggests that the animals can spread the virus to people or that they can be a source of the infection in the United States,” said Dr. Jane Rooney, a veterinarian and a USDA official.
The USDA said Sunday it’s not recommending routine coronavirus testing of animals, in zoos or elsewhere, or of zoo employees. Still, Rooney said a small number of animals in the US have been tested through the USDA’s National Veterinary Services Laboratories, and all those tests came back negative except Nadia’s.
The coronavirus outbreaks around the world are driven by person-to-person transmission, experts say.
There have been reports of a small number of pets outside the United States becoming infected after close contact with contagious people, including a Hong Kong dog that tested positive for a low level of the pathogen in February and early March. Hong Kong agriculture authorities concluded that pet dogs and cats couldn’t pass the virus to human beings but could test positive if exposed by their owners.
Some researchers have been trying to understand the susceptibility of different animal species to the virus, and to determine how it spreads among animals, according to the Paris-based World Organization for Animal Health.
The American Veterinary Medical Association and the federal Centers for Disease Control and Prevention have been recommending that out of an abundance of caution, people ill with the coronavirus should limit contact with animals. In general, the CDC advises people to wash their hands after handling animals and do other things to keep pets and their homes clean.
At the Bronx Zoo, Nadia, her sister Azul, two Amur tigers and three African lions developed dry coughs, and some of the cats exhibited some wheezing and loss of appetite, Calle said.
“In a question of being thorough, we did want to specifically test” for the virus that causes COVID-19, he said. Only Nadia was tested because it takes anesthesia to get a sample from a big cat. Her temperature was taken at the same time, and it was normal, Calle said.
The seven sickened cats live in two areas at the zoo, and the animals had contact with the same worker, who is doing OK, zoo officials said. They said they are taking “appropriate preventive measures” for the staffers that care for the ailing animals, and there are no signs of illness in other big cats on the property.
For most people, the coronavirus causes mild or moderate symptoms, such as a fever and cough that clear up in two to three weeks. For some, especially older adults and people, it can cause more severe illness, including pneumonia, and can be fatal.