Negotiators See Global Deal on Taxing Big Tech Companies Within Reach

livemint.com:

Negotiators trying to hammer out a global deal to change how and where large technology companies are taxed failed to reach an agreement this week, but participants said they are close enough for now to avert a damaging alternative: a new trade war between the U.S. and Europe. Meeting on Monday and Tuesday in Paris, tax officials from 143 jurisdictions had hoped to seal an agreement on a new way to dividethe taxes levied on the profits of about100 of the world’s biggest companies.

Such a deal—part of a series of changes to how, where and how much multinational companies are taxed around the world—would reallocate the taxation of some $200 billion in corporate profits across the world. The global initiative is meant to let countries capture tax revenue from the large companies at the center of the information-based economy. Currently, those companies can operate worldwide while concentrating their profits in their home countries or in small, low-taxed jurisdictions; they then pay relatively little tax in the more populous nations where many of their users are.

Failure to reach an agreement could have far-reaching consequences. If the talks collapse, several nations have threatened to adopt instead special taxes on these mainly American tech companies. Washington sees those taxes as hostile and could retaliate with tariffs.

A year ago, negotiators had described the first half of 2023 as a hard deadline. Officials guiding the talks said reservations by some countries were still preventing an agreement. But they said those concerns should be resolved in the coming weeks.

This would pave the way for a treaty to be agreed to by the end of this year. It would then have to be signed and ratified by participating nations. “There