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French president Emmanuel Macron has staked France’s claim to partial credit for the international agreement on global corporate tax, which will be endorsed by leaders of the world’s seven richest countries at the G7 summit in Cornwall this weekend.
“France has been fighting for four years to correct the profound injustice” of the international economy, Mr Macron told journalists at the Élysée palace. That injustice derived from “the fact that big groups earn super-profits because digital activity enables them to optimise so they do not pay their fair share of tax.” This was “inexplicable for our taxpayers and compatriots, and unjust for our companies... We carried this agenda. We fought for it.”
Mr Macron accused the Trump administration of blocking efforts to achieve an international corporate tax regime through the OECD for four years. He said France carried the same battle to the European Union. Several member states, like France, established national taxes on the profits of digital giants in their countries, “to move forward. This is what France has done. She is at ease with that.”
Sanctions
Former US president Donald Trump imposed sanctions on French wine and a number of other French products in retaliation. Mr Macron called the French companies who were affected “collateral victims of our sense of responsibility” and said it was important to remember and thank them “at the moment when we are registering a victory for this international tax.”
The Biden administration has suspended but not formally lifted the sanctions imposed by Mr Trump. “There is no more trade conflict since we all agree,” Mr Macron said. The new US administration “shares most of our convictions,” he added.
Mr Macron expects France to gain between €5 billion and €10 billion annually from the new international corporate tax regime, while European economies should gain about €50 billion. He said the agreement will take effect “around 2025”. Other officials have cited a shorter timeframe.
The Minister for Finance, Paschal Donohoe, has said meanwhile that the exchequer could lose €2 billion annually.
The accord “completes the work that began at the time of the 2008-10 financial crisis” and which earlier ended banking secrecy, Mr Macron said. “It is a massive advance towards more just and efficient globalisation.”