An agreement on rewriting outdated rules for international taxation is within grasp this year as the new U.S. administration of President Joe Biden is more open to a deal, finance ministers said on Thursday.
Nearly 140 countries are negotiating the first update in a generation to the rules for taxing cross-border commerce, to account for the emergence of big digital companies like Google , Apple and Facebook.
“After so many years of work and debate on the appropriate coordinated tax response to the challenges of digitalisation of the economy, a global agreement is within reach,” Italian Economy Minister Roberto Gualtieri said.
He was addressing an online ministerial panel hosted by the Organisation for Economic Cooperation and Development, which is steering the tax talks.
With the administration of former U.S. President Donald Trump reluctant to sign up to a new international agreement in its final months, countries in October pushed a deadline for an agreement back to mid-2021.
Though key technical details still need to be thrashed out, Biden’s presidency is fuelling hopes that Washington will drop past objections.
“When I spoke to the new finance minister of the United States I understood very much that there is a big willingness to make reform happen in the short time we still have,” German Finance Minister Olaf Scholz told the panel, a day after speaking with new U.S. Treasury Secretary Janet Yellen.
Canadian Finance Minster Chrystia Freeland said that agreement was needed more than ever in light of the general lack of international cooperation during the global pandemic.
“As we see the light at the end of the tunnel with COVID, with a new U.S. administration, one of our big collective tasks is rebuilding the rules-based international order. This agreement on tax is a big part of that,” she told the panel.
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