Pascal Saint-Amans says last year’s accord on taxing multinationals unlikely to enter rule books soon
One of the measures, which seeks to force the world’s 100 biggest multinationals to declare profits and pay more tax in the countries where they do business, is unlikely to achieve sufficient support in the US Senate to be implemented before an OECD-imposed deadline of mid-2023. However Saint-Amans said that the US would eventually sign up, or it risked returning its Big Tech giants to a scenario in which they would face a web of separate digital services taxes from multiple countries. “The alternative is so bad,” he said, adding that he expected such taxes to extend beyond Big Tech to multinationals in other sectors such as the pharmaceuticals industry.
The EU has been attempting to bring the minimum tax reform into EU law, but this requires unanimous approval of member states and Budapest continues to object. Saint-Amans said the measure had been “held as hostage”. “It seems that Hungary seeks to unleash some EU funds which are blocked by the EU Commission because of rule of law issues,” he said. Many tax professionals are sceptical that the deal will make it into other national legal codes without the support of important jurisdictions such as the US and major European economies.
Saint-Amans said implementation was “not losing impetus” and that elements would start to be legislated for in Europe within “a couple of months”. Hungary’s refusal would not stop the bloc’s biggest member states from going ahead with the plan by introducing their own national legislation.
He had originally planned to leave when the deal was reached last autumn, but stayed to help the new secretary-general, Mathias Cormann, appointed in June last year, launch the work of implementation. Saint-Amans came under fire from the Financial Transparency Coalition, a network of campaign groups, after it emerged that he would join advisers Brunswick. Saint-Amans denied there was a “revolving door” between the OECD and the private sector, saying he was neither joining a tax firm nor working on behalf of clients with his soon-to-be former employer. “What’s the counterfactual — that I die on my job and I can’t do anything else?” he said. The deal is the most radical tax reform since the League of Nations developed its first model treaty to prevent double taxation in 1928. The OECD previously estimated it would bring in an extra $150bn a year in taxes from multinationals, but it will shortly publish updated estimates which Saint-Amans said would show “much bigger numbers”.