On 6 September 2018, Bruno Le Maire, French minister of finance, defended the support of Berlin for the Commission’s proposal of taxing the digital giants. This followed the publication of a controversial article by the German newspaper Bild, stating the opposition of the German finance minister over the proposal. The substance of the article was denied by a spokesperson of the minister. However, Germany seems to agree on the principle of the proposal but it is divided by internal debates. The support of Germany on the proposal is crucial for France in a moment when the position of the other Member States is evolving. Currently, only Ireland is maintaining its opposition in principle, whilst the other Member States are prepared to look at certain parameters, though most of them prefer a solution at international level. The statement of the French minister comes ahead of the informal meeting of the finance ministers of the European Union that will be held on Friday 7 and Saturday 8 September, providing the participants with the opportunity to exchange their views on the taxation of the digital sectors (amongst others topics).
In a press release dated 31 August 2018, the Luxembourg government has stated its intention to appeal to the General Court of the European union against the decision of the European Commission ordering Luxembourg to recover €120 million from the Engie group. The decision, dating 20 June 2018, took the view that the tax rulings issued by Luxembourg to two intra-group financing structures, gave to the Engie group a tax treatment that does not reflect the economic reality, resulting in a competitive advantage in Luxembourg which is incompatible with the EU State aid rules. The Commission estimated that the group was able to avoid tax on 99% of the profits made by the two entities (Engie LNG Supply and Engie Treasury Management).
On 5 September 2018, the OECD published a report describing the latest tax reforms across 38 countries. According to the report, France, Latvia, Argentina and the United States have carried out major tax reforms with a strong focus on supporting investments. The report highlights a trend toward corporate income tax rate cuts, which has been largely driven by significant reforms in a number of large countries with traditionally high corporate tax rates. Furthermore, the report underlines that the taxation of digital companies has become a priority in many economies and that the disparities in views across countries have prevented the adoption of a common approach which can result in the introduction of heterogenous measures, creating complexity and uncertainty.
