French minister backs global deal to tax digital giants such as Google, Amazon and Facebook to prevent regulatory chaos

Facebook founder and CEO Mark Zuckerberg wants tax reform and says he’s glad the OECD is looking at the issue.

European Commission vice-president in charge for Values and Transparency Vera Jourova (L) shakes hands with the founder and CEO of US online social media and social networking service Facebook Mark Zuckerberg (R), in Brussels. Picture: AFP

The OECD needs to urgently reach a global deal to tax digital giants such as Google, Amazon and Facebook to prevent regulatory chaos, according to France's finance minister.

Speaking at the sidelines of world financial leaders, Bruno Le Maire said that if no agreement was reached soon, many digital tax regimes would start emerging all over the world.

“For the first time there is wide consensus among the G20 members on the necessity of having a new international taxation system,” Mr Le Maire said.

“We have to address the issue of digital companies making profits in many countries without any physical presence, which means without paying the due level of taxes,” he said.

“And we also have to address the key question of minimum taxation and the risk of having a race to the bottom on taxation,” he said.

Such a move would likely trigger US retaliatory tariffs, US Treasury Secretary Steven Mnuchin told reporters, underscoring Washington’s determination to thwart tax rules planned by France and other countries if no global deal is reached.

The OECD – including Australia – wants to agree on technical details of such a tax by July.

“There is a consensus to build a solution by the end of 2020,” Mr Le Maire said, noting the alternative – no agreement – would create a proliferation of different tax systems making life more difficult for companies.

“Lets be clear – either we have at the end of 2020 an international solution … clearly in the interest of all countries and digital companies, or there is no solution and … then it will be up the national taxes to enter into force,” Le Maire said.

“Instead of having one single, simple solution, we would have many different digital taxes, all over the world.”

Facebook founder and CEO Mark Zuckerberg on Friday backed moves by the OECD group, even if that means companies like his own paying more to national governments.

"We also want tax reform and I'm glad the OECD is looking at this," Mr Zuckerberg said.

"We want the OECD process to succeed so that we have a stable and reliable system going forward."

The OECD said in a statement on Thursday that the tax changes under discussion would bring in four per cent more global corporate income tax worth $US100 billion annually.

The revenue gains would be "broadly similar across high, middle and low-income economies, the OECD added in a statement.

"The aim is to ensure that multinational enterprises conducting sustained and significant business in places where they may not have a physical presence can be taxed in such jurisdictions," it explained.

Facebook's most recent tax documents show the tech giant paid about $13 million to the Australian Taxation Office during the 2017-18 financial year.

Additional reporting: Reuters, AFP