Yellen, France's Le Maire underscore importance of reaching deal in OECD tax talks

Slideshow ( 2 images )

WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen spoke on Monday with French Finance Minister Bruno Le Maire about the importance of working together toward a solution in the ongoing OECD discussions on international taxation, the Treasury said in a statement.

During their conversation, Yellen emphasized U.S. support for a strong economic recovery and explained the Biden administration’s broader plans to support jobs and investment in the United States, Treasury said.

“The Secretary also expressed support for measures to promote the global recovery through multilateral mechanisms and support for low-income countries,” it said.

Nearly 140 countries are racing to wrap up talks by mid-2021 to modernize outdated rules on how much governments can tax cross-border commerce and set a global minimum corporate tax rate. The talks stalled last year following a proposal by the former Trump administration to let companies out of new global tax rules, but Yellen has since dropped that demand.

Yellen had underscored her commitment to reaching a global agreement through the Organization for Economic Cooperation and Development (OECD), and will discuss the issue with her G20 counterparts when they meet virtually next week.

The United States in January had already refrained from imposing threatened tariffs on $1.3 billion in imports of French Champagne, cosmetics, handbags and other goods in retaliation for France’s digital tax, but said it could still impose them if the OECD talks did not result in a global solution.

Biden’s chief trade negotiator Katherine Tai last week said the same applied to U.S. tariffs threatened against goods from Austria, Britain, India, Italy, Spain and Turkey in retaliation for their respective digital services taxes.

Like the French tax, the USTR investigations into the taxes adopted by Austria, Britain, India, Italy, Spain and Turkey found that they discriminate against U.S. technology companies and are inconsistent with international tax norms.

Reporting by Andrea Shalal; Editing by Leslie Adler and Cynthia Osterman