October 21, 2020

Brussels leaves the launch of the ‘Google rate’ in the EU for mid-2021



This Monday, the Organization for Economic Cooperation and Development (OECD) decided to extend the negotiations for another six months, until mid-2021, to reach a global agreement on the rate for large digital companies. And this Tuesday the European Commission has communicated that it prefers to adapt its rhythms to the international body and let it hold until that date to propose or not a European rate. In Spain, however, the Government expects to launch it in January 2021, while it has already received the endorsement of the Senate.

The Spanish Government hopes to collect at least 900 million with this tax, which on a European scale is one of those foreseen for the repayment of the debt of 750,000 million that the European Commission will issue to finance the recovery fund for the health crisis and economical. In any case, as all the deadlines are being delayed, in Brussels the issuance of community debt is no longer expected to start before mid-2021. As the payment of taxes is quarterly, the first collection in principle would be in March 2021 , unless the Government decided to make an annual liquidation as the economic vice president, Nadia Calviño, slipped at the beginning of the legislature.

“We agree to quickly address the remaining issues with an eye toward bringing this process to a successful conclusion by mid-2021 and resolving technical issues, developing draft legislation, guidelines and international rules and processes as necessary to implement a consensus-based solution. “, explained the OECD, which coordinates negotiations between 135 countries to reach an agreement on the taxation of digital activities.

The commitment of the OECD and the countries that are part of the initiative was to reach a proposal agreed upon and accepted by all by the end of this year. However, the OECD estimates that the negotiations will not be completed until mid-2021.

“The absence of a consensual solution would probably lead to the proliferation of unilateral and uncoordinated fiscal measures, as well as an increase in harmful fiscal and commercial disputes,” the institution warned.

The OECD proposal focuses on two lines of action. On the one hand, in the one known as Pilar Uno, it is proposed to award a percentage of the profits to certain jurisdictions due to the possibility of digital companies to generate profits without sales or specific physical presence in a country. For its part, in Pillar Two a minimum rate is proposed to be collected in all jurisdictions, reports Efe.

“The European Commission has promised to act if an agreement is not reached in the OECD. Of course we will respect the deadline of the first half of next year,” said the European Commission’s Tax spokesman, Daniel Ferrie: “We must protect the credibility of the process and we can only do this by working together to reach a political agreement as soon as possible.”


Brussels also looks askance at its own home, because it knows that while France or Spain have advanced with this tax, there are countries, such as Denmark, Ireland, the Netherlands or Sweden that are more reluctant. And European taxes require unanimity to be implemented.

Government sources point out to elDiario.es that at the time this measure is approved in a multilateral forum, Spanish legislation will adapt to it. The Vice President of Economic Affairs, Nadia Calviño, explained in Brussels at the beginning of the legislature that Spain intended to follow the example of France, that is, to freeze the effective payment of the tax, pending a global agreement.

“In the French case, payments on account have been suspended, so that the payment is made at the end of the year [de 2020]. We envisage a similar system to give a little time to see how the negotiation evolves in the international arena. It is not about a suspension of the tax, but about the liquidation at the end of the year, “the vice president declared in February.

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