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10/12/2020, 11:17 AM (Source: TeleTrader)
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OECD fails to reach deal on global digital tax

The Organisation for Economic Co-operation and Development (OECD) said on Monday the group failed to reach an agreement on the taxation of large digital companies, although it managed to draft a set of principles regarding their corporate taxation.

The digital tax talks have been pushed until mid-2021 as major political issues still remain, the OECD said. Negotiations with the United States have been one of the major sticking points so far. Angel Gurria, Secretary-General of the OECD, warned during a press conference that not reaching a deal would lead to a trade war and will "inflict a very, very serious" and "extremely costly setback," particularly considering the ongoing coronavirus pandemic and its economic impact.

"Under a worst-case scenario - a global trade war triggered by unilateral digital services taxes worldwide - the failure to reach an agreement could reduce global GDP by more than 1% annually," the OECD estimated.

Breaking the News / JC