The federal government is fighting at G20 level to persuade United States not to impose import duties on steel and aluminium planned by Donald Trump. “I do not think of idea of US president to levy punitive duties,” said Vice-chancellor Olaf Scholz (SPD) of German press agency. He landed on Sunday in Buenos Aires, where he took part in meeting of finance ministers of 20 most important economic powers.
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The finance minister also wants to meet his counterparts from USA, Steven Mnuchin. “Protectionism is an invention of nineteenth century, it should not be a means of politics to respond to challenges of 21st century,” Scholz said. Negotiations are now crucial. He is a follower of free and fair trade: “The world is growing toger and it should also remain toger – and free trade is a very important resource for this.”
Federal Minister of Finance Peter Altmaier (CDU) also wants to explore ways of understanding in face of impending US customs duties. “I don’t want us to get into a trade war between Europe and US,” he said before departing to a trip to Washington in ARD broadcast report from Berlin. The problem with current situation is “that re is a risk that we will come into a spiral of unilateral action.” A trade war “would end up at expense of citizens in both regions”.
Taxation of digital economy
Anor topic of conflict in discussions in Argentina, which Presidency has taken over from Germany, is a stronger taxation of internet companies such as Google. “The international community must find answers to challenges of digitisation, taxation of digital economy is part of it,” said Scholz.
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US Treasury Secretary Mnuchin has announced opposition to EU plans for tougher tax rules. They would mainly meet US corporations like Google, Facebook and Apple. “The United States strongly opposes proposals from any country to meet digital companies,” he shared before G20 meeting began. “Some of se companies contribute most to jobs and economic growth in United States.”
In a new initiative, EU Commission intends to propose three percent sales tax for internet companies that make at least 750 million euros in turnover worldwide and an online turnover of at least 50 million euros in EU. Most of companies have settled European headquarters in Ireland – country has attracted m with low tax rates. They also make big profits in or EU countries, but pay hardly any taxes if y have no offices re. The value added is digital, cross-border and not in factories in individual countries.
“Avoiding national single aisles”
The new approach stipulates that tax levies will be payable nationwide in all EU countries, where sales are also generated, i.e. in all EU Member States where users of services are located. According to estimates, this could lead to a tax receipts of five billion euros.
It is about complicated tax law issues, said Scholz. “The G20 meeting in Buenos Aires is a real place for this debate.” It is important that allocation of taxation rights “corresponds to place of value added and that such steps are internationally coordinated as widely as possible”. With regard to EU countries such as Ireland, which could curb an EU approach, he said it was important to “avoid national single-aisles and pursue a closed stance”.
The tax avoidance of digital companies in Europe will also be an issue at next meeting of EU heads of State and Government at end of week, in which Chancellor Angela Merkel (CDU) also participates.
