A collection of the brief insights throughout January 2020 of the type provided on an ad hoc basis in our Latest digital tax byte update.
23 January 2020 France and US appear to have reached a standstill on DST collection and tariffs
The French and US Presidents and Finance Minister/ Treasury Secretary have talked about a standstill on DTS collection, and section 301 tariffs. But the DST remains in place, and will need to be accrued for. It was also made clear that either side could fall back and deliver a broadside if any events unrelated to tax were to cause international friction.
There were also discussions at the World Economic Forum between Messrs. Mnuchin and Le Maire, on the way forward at the OECD. They were joined by OECD Secretary General Gurria (and Director of the OECD's Centre for Tax Policy and Administration Pascal St Amans). Press reports are emerging today (again, largely based on comments from M. Le Maire) that the US is willing to back away from its desire to have Pillar 1 optional, and so will redefine what it means for it to operate as a “safe harbour”. (Quite what that means is, as yet, unclear.) In Congress, leaders of the Senate Finance committee reacted positively to the notion of a compromise putting energy back into OECD efforts.
The US came out strongly against other countries moving forward with DSTs, saying that 25% auto tariffs could be imposed against Italy and the UK if their DSTs are acted on. Nonetheless, the UK Chancellor vowed that the UK would proceed with implementing its DST in April (and would remove it if an OECD solution arises), with Mnuchin responding that the US would continue to push back against such plans.
