G20 officials want to optimize taxes from tech giants like Google in a bid to help raise revenues in countries around the world, they said Sunday.
The idea, officials with the The Organisation for Economic Cooperation and Development (OECD) said, would be to tax Google and other international titans in the places where they do business, rather than where their subsidiaries are registered.
New rules by the OECD outline the steps to do this, saying it could boost tax revenues by $100 billion a year.
And leading world economies will have to show unity in laying down the law for companies, G20 officials said Sunday.
The G20 comments were mostly focused on the U.S., as many of the tech giants call the country their home — and officials from the world's top economies did not want any new rules to be stalled for the presidential election that will take place in November.
German Finance Minister Olaf Scholz said there was “no time to wait for elections” as he addressed a tax seminar on the sidelines of a meeting between finance ministers and bankers. He said the issue needs “leadership in certain countries,” looking at U.S. Treasury Secretary Steven Mnuchin as he spoke.
The OECD wants to set a minimum effective level where companies would pay taxes, and it wants to have an agreement in place by July. They want to have an endorsement from the G20 by the end of the year.
OECD head Angel Gurria said a coordinated answer is “the only way forward.”
A draft G20 communique showed that financial leaders planned to endorse the OECD’s ideas.
Last year, similar efforts by the OECD were stalled due to last-minute changes requested by Washington D.C. Leaders suspect that U.S. officials are reluctant to engage the matter before the presidential election, but Mnuchin said OECD countries were close to reaching a deal. Mnuchin did say that some parts of the proposal may have to be voted on in U.S. Congress.
Mnuchin wanted to reassure others that the U.S.’s idea to add a “safe harbor” regime to the rules wouldn’t mean that companies could opt out of paying taxes.
Resistance to the domination of big tech companies has been a hot topic as of late as leaders worldwide reckon with how to deal with them.