Global Talks on Taxing Tech Firms Will Slip Into 2021

Many governments, in Europe and elsewhere, have increasingly looked to implement so-called digital service taxes, which apply largely to American tech giants like eBay and Amazon. Italy, Spain, Austria and Britain have all announced plans to levy digital services taxes, following the lead of France.

In response, the United States has threatened to impose tariffs on imports from countries that impose the taxes. The administration said in July that it would move next year to tax $1.3 billion in products like cosmetics and handbags from France, in retaliation for its digital service tax. Mr. Saint-Amans said Monday that he had seen no indication that the United States or France would hold off on re-escalating the dispute next year.

A key goal of the talks is to de-escalate those tensions by reaching international agreement on how and where digital activity may be taxed. In recent months, including what officials described as 70 days of virtual conference meetings online, negotiators have sought to flesh out the details of what such an agreement might look like in practice — while essentially ignoring the high-level political disputes that are keeping any agreement from coming together.

Typically in international tax negotiations, parties strike a political agreement first and then fill in the details, said Manal Corwin, a former Treasury Department official in the Obama administration who is now the national leader for international tax at KPMG. “Here, it’s a bit reversed,” she said. “They’re trying to make as much progress as possible on the technical details, and then try to make a political agreement.”

One of the technical documents released on Monday would guide where multinational companies pay taxes, including a new push that would effectively make some tech companies pay taxes where their customers are, even if they have no operations in those countries. Another would establish a new global corporate minimum tax.

Those efforts, combined with changes in international taxation that were included in President Trump’s signature 2017 tax law, could raise up to $100 billion a year in new tax revenue from multinational companies, the O.E.C.D. estimates. Another $100 billion in corporate taxes could shift between countries. Countries of all income levels would benefit from additional tax revenues, the O.E.C.D. estimated on Monday, though some low-tax countries like Ireland could lose out.

The American business community is divided over the talks. Some multinational companies, including many technology companies, are eager for an agreement that would head off the complications of complying with different digital services taxes in a wide range of countries. Other companies fear the agreement would raise their taxes unexpectedly and were a driving force in pushing the administration to announce its disengagement from negotiations in the summer.

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