By Noemie Bisserbe
CHANTILLY, France--Finance ministers and central bankers from the Group of Seven industrialized nations pledged on Thursday to define the outlines of a new digital tax by January 2020.
The new tax will be based on digital, not just physical presence, according to a summary of the discussions released Thursday. Reallocation of profits among countries will depend on the share of the companies' revenue that comes from digital products and services. It won't, however, include a specific clause targeting big-tech companies, a big concern for U.S. officials.
Ministers said they hoped to finalize the tax, under the aegis of the Organization for Economic Cooperation and Development, by the end of next year.
Senior officials from the G-7 central banks, the International Monetary Fund, the Bank for International Settlements and the Financial Stability Institute also submitted a report on Wednesday highlighting the risks posed by Libra and other cryptocurrencies.
The working group, led by Benoit Coeure, a member of the executive board of the European Central Bank, noted that the new digital coins gave rise to "a number of serious risks related to public-policy priorities including, in particular, anti-money laundering and countering the financing of terrorism, as well as consumer and data protection, cyber resilience, fair competition and tax compliance," according to a summary.
Regarding the economic outlook, finance ministers and central bank governors noted that "global growth appears to be stabilizing with an expected moderate pick-up in 2020," although risks are tilted to the downside, according to the Chair's summary of the discussions.
Write to Noemie Bisserbe at firstname.lastname@example.org