The French finance minister said on Friday that the European Union should push ahead with its own digital tax in the first quarter of 2021 if broader efforts to find an international solution do not bring a breakthrough this year.

Currently, nearly 140 countries are negotiating the first major rewrite of international tax rules in a generation to account for the rise of big digital companies.

With a blueprint for a deal due to the Organisation for Economic Cooperation and Development (OECD) next month, the aim of reaching an agreement by a year-end deadline is looking increasingly challenging.

Speaking to reporters ahead of a meeting of European finance ministers in Berlin, France’s Bruno Le Maire said that he wanted to have a fair and efficient international taxation system as soon as possible and ideally within the OECD framework.

Le Maire said that “If you look at the consequences of the economic crisis, the only winners are the digital giants. I want to make things very clear: if it proves to be impossible to get a consensus by the end if this year at the OECD level…we should have, by the beginning of next year, 2021, a European solution for digital taxation.”

Le Maire has accused the United States of seeking to undermine international talks to update cross-border taxation for the digital age.

Olaf Scholz, German Finance Minister, who is hosting the Berlin meeting as his country currently holds the presidency of the 27-member bloc, said EU finance ministers would discuss the state of play and how to proceed on the matter.

Scholz said that “We’re working very hard to get a blueprint on the question of digital taxation in the OECD. And we will work to make it feasible that a global consensus of this question can be reached.”

A digital tax is among the proposals to give the EU its own revenues as a way to pay back jointly issued debt during the COVID-19 pandemic.

In July, the bloc decided to jointly borrow EUR 750 billion on the market and spend it to kick start the economy, plunged into a deep recession by the COVID-19 pandemic.

Scholz said that “The Ecofin will have to solve a lot of problems that we are facing due to the COVID-19 crisis and so it’s a very good thing that after months, when we met in video conferences and other ways of communication, we are present here and able to speak together. After we decided to take very big debt as European Union to tackle this crisis together, to work against the crisis and to work on the recovery in Europe, it is necessary that we are also deciding the question of how to pay this debt back.”


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