Midsection of businessmen discussing over graphs on table at office.
31 May 2019

A major step has been taken in overhauling the international tax system

In the course of a work meeting officially inaugurated by Bruno Le Maire on 28 May 2019, the 129 member States and Territories of the OECD/G20 Inclusive Framework on Base Erosion and Profit Sharing (BEPS) adopted an ambitious work programme to reform international taxation rules and adapt them to the 21st century's economy.
Two complementary strands underpin this work programme.

The first is set to explore solutions that seek to better tax companies' profits where they create wealth, whether or not they are physically present in a territory, in the context of an economy increasingly based on digital technology. This question follows on from the action deployed by France, within the European Union and the OECD, with a view to achieving fairer taxation of such companies, chief among which are the leading digital companies.

The second explores undertaxation through minimum taxation rules. It takes up a proposal, put forward by France and Germany and supported by many other States, to limit the tax “race to the bottom” among States, a race that leads to tax optimisation strategies by a number of multinationals and deprives States of resources required to finance their public services. Each State should be able to collect a minimum amount of tax revenue from companies that take advantage of undertaxation regimes in other countries.

The work programme's adoption is a decisive step, which, on the basis of factors highlighted and practical questions put to the various technical groups that form the OECD, will enable analysis of the different options and proposals as well as work on assessing their impacts.

Now more than ever, the goal is to reach an agreement with all States by 2020. France will be actively supporting the search for consensus, which implies an agreement of a political nature, and will also be working at the highest levels in this respect, in the context of its presidency of the G7.