ICYMI — US will publish report on Dec 2 over whether France’s digital tax rules (aimed almost exclusively at US tech firms) represent an unlawful barrier to trade, potentially leading to Washington imposing unilateral sanctions.
That pact just came to an end, and all eyes are now on @OECD which has promised to publish draft rules on global digital tax rules by next month (more here: politico.eu/pro/oecd-digit…)
A lot is riding on that tech, which policymakers hope to finalize by the summer. The crux: should tech firms be taxed where their users are, or where they are headquartered (and where, companies argue, economic value is generated)
Both sides of argument are willing to compromise, but the devil is in the detail, particularly over how to divvy up any so-called “excess profit” that could then be taxed by individual govts
This stuff is super geeky and I hear you already turning away. But it plays to a bigger question, one that is being discussed this week in Berlin at annual @intgovforum: who gets to set rules in digital age when there’s no global de facto standards?
Sure, we’ve had the same questions around global trade for centuries. And, tbh, figuring out who should be able to fax companies is one of the more straightforward questions (though it could still lead to trade war)
But in other areas: online content, privacy, competition, industrial policy, the lines are very blurry and pessimism is setting in that not global rules can be created in time to avoid “splinternet.” (Yes, my pet topic, soz)
But if we wake up in 5-10 years to bifurcated digital world, that will have significant implications for how we all live. (Caveat: the alarming climate change news this week should but this ALL into perspective)
But I’ll leave you with this from what a senior policymaker told me today: “Global consensus around digital rules is for the birds, it’s not going to happen. We’re going to have unilateral action.”
Rant over. Thoughts appreciated.
