As technology becomes a larger and larger piece of the overall pie in the global economy, so too do the concerns of various nations about how to properly tax the booming sector of industry. The international Organisation for Economic Co-operation and Development (OECD) plans to address this very matter in the coming year and hopefully have a worldwide agreement in place by Summer 2021 if all goes well. The new US Administration under President Joe Biden has indicated it intends to be fully involved in the conversation.
The news comes via German Finance Minister Olaf Scholz, who claimed the global tech tax on Silicon Valley businesses and firms looks “highly likely” following a January 28, 2021 phone call with US Treasury Secretary Janet Yellen, as reported by CNBC. Previously, some European nations had already implemented their own taxes, however, many nations had been cautious to move forward with said taxes, waiting for action by the OECD. For its part, the OECD ran into disputes during the Trump presidency which, in addition to increasing tension in a trade war with China, threatened to impose various tariffs on European industry.
It is unknown at this time whether or not the OECD can officially come to an agreement on a global tax that should be applied across the nations of its participating members. Currently, the United States is facing its own unique month of trade conversations and debates following the massive skyrocket of GameStop stock price and decisions by stock broker apps like Robinhood to restrict trade. This is resulting in an upcoming US Congressional hearing that could see action taken at home.
Nonetheless, Biden’s engagement and the positive mood between the new Administration with European nations in the OECD seem to signal that new global tech giant taxes could be around the corner as negotiations begin in the months ahead.