Will oppose any step back from Bali statement on war, says France FM

Under Pillar One of BEPS, multinational enterprises with global turnover above 20 billion euros and pre-tax profit above 10 percent of revenue will have to pay 25 percent of the profit before tax

France Finance Minister Bruno Le Marie on Wednesday said the members of Organization for Economic Co-operation and Development (OECD) need to implement pillar two of the Base Erosion and Profit Shifting framework, and the negotiations on pillar one should be completed without delay.

Addressing a media briefing on the sidelines of the G20 meeting of Finance Ministers and Central Bank Governors (FMCBG) in Bengaluru, Le Marie said France would oppose any ‘step-back’ from the communiqué of the G20 Heads of States in Bali last November (specifically on Russia-Ukraine), and that a common framework to deal with global debt needs to be implemented urgently.

“We seek the implementation of the pillar two on the OECD-BEPS framework and the completion of the negotiation of pillar one, which should be decided without any delay,” Le Marie said.

“We urge all OECD member states to complete the negotiation of pillar one on digital taxation. We have been waiting too long.  International community should give the evidence that we are ready not only to talk, but also to decide,” he said.

Under Pillar One of BEPS, multinational enterprises with global turnover of above €20 billion and pre-tax profit above 10 per cent of revenue (known as super normal profit) will have to pay 25 per cent of the profit before tax. Pillar Two mandates a global minimum tax of 15 per cent. It is aimed to eliminate the concept of race to the bottom in terms of tax competition.

“I want to make it very clear that we will oppose any step-back from the statement of the leaders in Bali on this question of the war in Ukraine,” Le Marie said.

“We fully trust India to reach a strong communique and we are quite happy to see India at the driving seat today. We share the view of Prime Minister Modi: this is not and this must not be an era of war,” he said.

Le Marie said in the current G20 meeting, European members reaffirmed their unity and their total determination to adopt new sanctions against Russia.

“Either we stick to the Bali communique, or France will oppose any communique during this G20 of the finance ministers. I cannot be any clearer,” Le Marie said, adding that the finance ministers should try to bring changes to the language on Ukraine already decided by their bosses (Presidents and Prime Ministers) last year.

As reported, India is averse to the use of the term ‘war’ in the communiqué, but softer terms like ‘crisis’ may not be acceptable to the G-7 members, all of whom are a part of G-20 as well. At the final meeting of G-20 under Indonesia’s presidency in November last year, the terms ‘war in Ukraine’ and ‘aggression by the Russian Federation’ were used.

Le Marie spoke in common voice with his counterparts like Finance Minister Nirmala Sitharaman and United States Treasury Secretary Janet Yellen when he said that the debt levels of some low and middle income nations were a major cause of concern.

“To address this concern, there is a common framework which proved to be very efficient. So it is no time to improve the common framework. It is time to implement the common framework,” he said.