German FM Scholz Optimistic About 2020 Digital Tax Consensus

by Ulrika Lomas,, Brussels

31 August 2020

German Finance Minister Olaf Scholz is optimistic that an international agreement on taxing the digital economy will be reached this year.

Addressing the media following a two-day meeting of German-speaking finance ministers in Vienna, Scholz said that he is “confident” that an agreement will be concluded by the fall of 2020.

Scholz added that a multilateral agreement would help to defuse tensions between certain countries with regards to country-level digital services taxes.

Under pillar one of its digital tax work, the OECD is formulating new rules that would allocate some taxing rights to market jurisdictions, regardless of whether a supplier of digital services has a physical presence there. However, in June 2020, the United States, which disagrees with the current approach, withdrew from these negotiations.

Nevertheless, the G20 said at the end of its July meeting that it is expecting the OECD to submit a “blueprint” for new global digital tax rules at the G20’s next meeting in October.

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