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Finance Minister: OECD Digital Tax Deal Likely

Published: in FINTECH by .

PYMNTS.com


Germany’s finance minister sees OECD member states reaching a deal by this summer on imposing a tax on major digital firms.

OECD member states have until this summer to agree on a tax. If they fail to do so, some states may move to impose their own taxes.

The OECD failed to reach an agreement last summer after the Trump administration pulled out of negotiations. The Biden administration, however, has signaled it is game to rejoin the talks.

German Finance Minister Olaf Scholz told CBNC during an interview on Friday that he now sees a deal as “highly likely” by the summer deadline. Scholz added he had recently spoken with newly-confirmed U.S. Treasury Secretary Janet Yellen.

“I’m really confident that we’ll get an agreement,” Scholz told CNBC.

Yellen said during her Senate confirmation hearing that she supported a global tax on major tech firms and said the U.S. would actively participate in discussions with other OECD member states. The tax would be imposed on digital companies that meet a certain revenue threshold.

The Trump administration pulled out of the talks last summer, a move that reportedly shocked European negotiators at the time, according to CNBC.

If an OECD deal cannot be reached by summer, the European Commission may move to impose its own tax. CNBC noted that this may prove to be difficult, as the tax would require the unanimous approval of all 27 EU members.

Some EU states have already moved to tax large digital companies, including France, Italy and Spain. CNBC said France is already demanding payment, while Spain and Italy are waiting to see if the OECD reaches an agreement by the summer deadline.

Meanwhile, Russian regulators have also been taking aim a U.S. tech companies.

As reported earlier this month, hardware spanning computers and mobile devices sold in Russia will be required to have Russian software pre-installed beginning July 1, according to The Hollywood Reporter.

The new regulations would impact several of the world’s top tech firms, including Apple and Samsung, by requiring that they pre-install software such as the Yandex web browser and pay additional licensing fees.

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