OECD: No agreement on global digital tax this year

Europe and the US are still deeply divided on the issue

The Organisation for Economic Cooperation and Development (OECD) warned on Monday that there will be no agreement of a global digital tax this year. The issue has deeply divided Europe and the US, news wires reported.

The Paris-based organisation is leading negotiations between nearly 140 countries in a bid to finally solve the thorny question of where tax is paid by major digital firms, such as Facebook, and how much. The official spearheading the talks admitted it would require an additional push from governments to get a deal next year.

“The glass is half full: the package is nearly ready but there is still no political accord,” said Pascal Saint-Amans, the OECD's head of tax policy. The Frenchman predicted there could be an agreement "sometime in 2021."

European countries want the tech titans to pay their "fair share" of tax in countries where they operate. Many EU officials believe they are avoiding paying the right amount. They say levies should be calculated on where the digital activity takes place, and not where firms have their European headquarters.

Slow progress on the international stage has seen some countries opt to go it alone. The UK brought in its own 'digital services tax' earlier this year, prompting the US to open a trade probe into what it called an "unfair" levy. The Trump administration has threatened to hit European products with additional tariffs unless they scrap the taxes, arguing they are deliberately targeting US corporations.

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