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OECD: Taxes on ‘Digital Companies’ Are Coming

November 18, 2019, 9:02 PM UTC

The Organization for Economic Cooperation and Development hopes to have new rules for “the taxation of digital companies” in place by January, Angel Gurría, secretary-general of the OECD, said Monday at the Fortune Global Forum in Paris.

Though big tech wasn’t specifically mentioned, the message was clear: Silicon Valley companies are likely to owe more taxes in Europe and elsewhere.

While the OECD just unveiled its digital tax proposal last month—targeting large multinational corporations with significant sales in countries where they are not physically based, such as Amazon and Facebook, among others—Gurría underscored the agency’s priority to bring it into effect quickly.

Gurría described the tax on digital companies as the second phase of the OECD’s attempts to address inequalities between average taxpayers and wealthy companies, a number of which moved their official domicile to low-tax regions like Ireland to shelter a larger proportion of their profits. The global recession helped “detonate” outrage over such inequalities, Gurría said: “That became absolutely politically impossible after the crisis.”

The first phase has included a crackdown by OECD countries to collect fines and interest payments on unpaid corporate taxes. Earlier this year, Apple agreed to pay a more than $570 million tax bill in France, though the iPhone maker is still appealing the more than $14 billion it was ordered to pay in back taxes to Ireland several years ago. In September, Google paid more than $1 billion to settle another tax case in France.

France itself has already passed its own digital tax aimed specifically at a group of about 30 tech companies, but the OECD’s proposal could be broader. “By June, we will have a full roadmap,” Gurría said at the conference.

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