A new devastating trade war predicted for the world




Disputes over digital taxes and attempts by the authorities of different countries to impose them could provoke a new destructive trade war, which will result in an annual loss of one percent of global GDP. This prediction was made by the Organization for Economic Cooperation and Development (OECD), excerpts from the report of which are cited by CNBC.





The digital tax in question applies to the income of digital companies producing content and intangible goods such as online movie theaters. Among them, it is customary to single out the “big four”: Google, Apple, Facebook, and Amazon (abbreviation GAFA for the first letters of the names).

They are able to sell their products to consumers from different countries without being tied to any of them. Many register in countries with low tax rates, such as Ireland. At the same time, in practice, it is extremely difficult to prove the fact of a purchase by a client from a certain state and to achieve the payment of income tax to his budget.

Because of this, the authorities of different countries over the past few years have been trying to develop a new tax that would apply to the income of such companies. The European Union seeks to develop a common policy but has not yet succeeded in this. The OECD acts as an intermediary in negotiations. Another contender for some of the profits of digital companies in the United States, whose President Donald Trump points to the American origin of most digital corporations.

Digital taxes are already in place in France and the UK. The EU does not rule out the introduction of a similar tax throughout its territory, if by the end of 2020 it is not possible to work out a common solution. At the same time, the OECD warns that the introduction of such taxes is fraught with numerous disputes at the interstate level and could lead to a new trade war, in which many more countries will participate.

The total damage from it in the form of under-delivered goods could reach one percent of GDP annually. The organization points out that in the current situation, the world economy, severely affected by the crisis, cannot afford new shocks.





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TAGS: TRADE WAR

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