For years, the European Union has been leading the fight to impose a global tax on technology multinationals. After years of resistance by the Trump administration, the Europeans now hope the incoming Biden administration will be willing to compromise – or face a possible digital tax.
Google, Amazon, Facebook and Apple: four companies dubbed as GAFA in France by those who criticize what they say are the multinationals’ avoidance of European taxes.
The projected outcome of the presidential vote in the United States did not change Europeans’ eagerness to tackle the issue with a Biden administration after years of resistance by the Trump administration.
Thierry Breton is the E.U.’s Internal Market Commissioner.
He explains that Europe is not naive anymore in its expectations regarding its partnership with the United States. Europeans cannot afford to be naïve anymore, he said.
The Organization for Economic Cooperation and Development, OECD, hosted the international talks over digital taxation. Members postponed a deadline for an agreement into 2021 after the U.S. pulled out of talks in June due to the coronavirus pandemic.
French economy minister, Bruno Le Maire, said Washington is unlikely to drop what he called its confrontational stance on the issue no matter who is in the White House.
"Digital giants are now the adversaries of governments," Le Maire said, vowing that they would soon be taxed "at the same rate as French companies."
It is a position echoed by Commissioner Breton.
He said that a discussion has been initiated by the OECD and even though the United States got out of it, he said this a negotiation and they can come back. Europeans set a deadline until June 2021 to complete this negotiation, Breton said. If all the other countries agree but the United States does not return to the negotiating table, Europe will take its responsibilities and we will impose a tax, Breton insists.
Some in Europe warn that a Biden administration will still resist imposing a tax on U.S. technology companies. President-elect Biden and his vice president-elect, Kamala Harris, reportedly have as many connections with Silicon Valley as the Obama administration had between 2009 and 2017.
Arno Pons is the head of Digital New Deal, a Paris research organization.
Pons said Joe Biden was Barack Obama’s vice-president during an administration that was clearly pro-GAFA and probably has the same views now. As for Kamala Harris, originally from California, he sees her as having close ties to the executives of big technology firms. Pons cites as an example the recent nomination in the transition team of former employees from Apple and Facebook.
Last month, the OECD warned that tensions over a digital tax could trigger a trade war that could wipe out one percent of global growth every year.