Britain, France, Italy and Spain suggested a “phased approach” to global digital taxation talks in a joint letter to the U.S. treasury secretary recently, which they said could open the way for a deal this year.
The four countries sent the letter, seen by Reuters on Friday, to Secretary Steven Mnuchin after he called for a pause in negotiations to update cross-border tax rules for the first time in a generation.
In the absence of a global deal, Washington has threatened trade retaliation against European countries that create digital taxes as a way to raise revenue from the local operations of big tech companies such as Alphabet Inc’s Google and Facebook Inc.
“We believe that a phased approach, initially focused on automated digital services, would make a political agreement within reach this year,” Mnuchin’s European counterparts said.
They added that it would pave the way for possible transitional solutions to be discussed with the United States, notably with respect to existing or upcoming national digital service taxes.