French finance chiefs expect a deal over a digital tax for tech giants such as Google, Amazon, Facebook and Apple, known as the "Gafa", to be reached before the end of the summer after the new administration in the United States withdrew one of the key stumbling blocks in the discussions.
Under the previous president Donald Trump, the US had insisted on a so-called safe harbour clause that would have effectively allowed the tech companies to volunteer to pay the Gafa tax.
But in a videoconference with G20 colleagues on Friday, Janet Yellen, the new US Treasury Secretary, said her country would engage robustly in the talks and was no longer backing the option of safe harbour.
France’s Finance Minister Bruno Le Maire told the G20 meeting that an agreement by the summer had to concluded without delay.
“This is a major breakthrough,” said Le Maire on social media. “An international agreement on minimum business taxation and taxation on digital services is within reach.”
Heureux d’entendre @JanetYellen annoncer que les 🇺🇸 renoncent au dispositif de "Safe Harbor" qui bloquait les négociations. C’est une avancée majeure. Un accord international sur la taxation minimale des entreprises et la taxation sur les services numériques est à portée de main.
— Bruno Le Maire (@BrunoLeMaire) February 26, 2021
Daniele Franco, the economy minister in Italy – which holds the G20 presidency – echoed Le Maire’s optimism.
Franco said a deal could be struck at a meeting of G20 finance ministers and central bank chiefs in Venice on 9 and 10 July.
The US tech giants have long been accused of exploiting loopholes to minimise their tax bills.
Negotiations on the issue have been deadlocked, with the US and the European Union on opposing sides of the argument.
