Owen, Christopher: Global Survey – March 2019

13 February 2019, the Bahamas government tabled proposed the Commercial Entities (Substance Requirements) (Amendment) Bill to expands and clarify various definitions, and substance and reporting requirements under the original legislation.

The Commercial Entities (Substance Requirements) Act, 2018 was among a package of legislation passed in December 2018 aimed at implementing measures to ensure compliance with international standards on tax governance and transparency.

Under the Act, commercial entities must demonstrate that they have substantial economic presence in the Bahamas by having income generating activities. They must also demonstrate local management and control.

The Act, passed in December 2018, was meant to satisfy the EU Code of Conduct (Business Taxation) Group's requirements in respect of companies' physical presence in a jurisdiction, but apparently fell short in its treatment of holding companies and residence criteria.

The proposed amendments, which will be deemed to have come into force on 31 December 2018, are considered necessary to avoid the Bahamas’ inclusion when the EU updates its ‘blacklist’ of jurisdictions deemed to be non-cooperative for tax purposes.

7 February 2019, a House of Commons Delegated Legislation Committee voted by nine votes to eight in favour of progressing the draft Non-Contentious Probate (Fees) Order 2018 to the Commons for approval. If approved, it will come into force 21 days after the day on which the Order is made.

The government’s previous proposal for reforming probate fees had to be dropped because of the 2017 general election. The current draft Order will replace the existing flat rate probate fee of £215 in England and Wales with a new banded system under which fees will increase with the value of the estate as follows:

-£250 for estates between £50,000 and £300,000;

-£750 for estates between £300,000 and £500,000;

-£2,500 for estates between £500,000 and £1,000,000;

-£4,000 for estates between £1,000,000 and £1,600,000;

-£5,000 for estates between £1,600,000 and £2,000,000;

-£6,000 for estates exceeding £2,000,000,

The proposal has attracted overwhelming opposition and a number of bodies have questioned the legality of the way it is being introduced through a Statutory Instrument. It is argued that because the proposed fees bear no relation to the cost of processing the application, it should be regarded as a tax and therefore be subject to full parliamentary scrutiny.

13 February 2019, the Cyprus cabinet approved a series of changes to Cyprus Investment Programme that are designed to make it “more targeted and trustworthy”.  The new changes will come into effect on 15 May 2019.

Under the new criteria, the programme will be limited to 700 applicants per year and the required investment amount will be raised from €2 million to €2.5 million, including the purchase of a residency, and the total. There will also be a mandatory donation of €75,000 to the Research and Innovation Foundation and a second €75,000 contribution to the Cyprus Land Development Corporation to be used for affordable housing.

In addition, an applicant must have held a Cyprus residence permit for at least six months before being naturalised as a Cypriot citizen and must maintain the required investments for a period of at least five years from the date of naturalisation, instead of three years.

Where the investment relates to the purchase of real estate or property, as well as in the case of a permanent homeowner, a planning permission, a completion certificate and a bank waiver will be required.

Stricter criteria have also been adopted to ensure that due diligence procedures are more stringent and effective.  Scrutiny of each applicant is to be conducted by an international agency, investors must obtain a Schengen visa and applicants will be excluded if rejected by other EU member states with similar schemes.

Finance Minister Harris Georgiades said the scheme had been launched in the aftermath of 2013 banking crisis and 1,864 citizenships had been granted within the framework of the scheme, bringing in total investment of €6.6 billion.

The new measures were primarily a response to criticism contained in a European Commission report, released in January, which expressed concerns about the ‘investment migration’ policies of Cyprus, Malta and Bulgaria.

The report warned that the schemes could help organised crime groups gain access to the EU and posed risks of money laundering, corruption and tax evasion. It also noted weaknesses in the Cypriot and Maltese schemes, which did not adequately check the source of the wealth of applicants.

19 February 2019, the Cyprus Securities and Exchange Commission (CySEC) issued proposals to bring virtual currency and crypto-asset activities under the ambit of its anti-money laundering (AML) regime, in line with the provisions of the EU Fifth Anti-Money Laundering Directive (5AMLD).

CySEC further intends to 'gold-plate' the directive by extending AML obligations to three activities that are not included in the EU 5AMLD:

-Exchanges between crypto assets;

-Transfers of crypto assets;

-Participation in, and provision of, financial services related to an issuer's offer and/or sale of a crypto asset.

The EU directive only imposes AML regulation on providers that exchange virtual currencies for fiat currencies and vice versa, and on 'custodian wallet providers'. CySEC's proposed rules go much further, covering, for example, initial coin offerings (ICOs) as well.

CySEC says it considers the extension of AML supervision to these transactions to be 'necessary and proportionate', and in line with Financial Action Task Force (FATF) recommendations.

In its October 2018 paper ‘Regulation of Virtual Assets’, the FATF concluded that distributed ledger and crypto-asset technology presented new opportunities for criminals and terrorists to launder proceeds or finance illicit activities.

1 February 2019, the Council of the European Union published letters sent to six international financial centres seeking high-level commitments to abolish or amend ‘harmful preferential’ tax regimes without any grandfathering mechanisms by the end of 2019.

The letters concern the replacement of ‘harmful preferential tax regimes’ identified by the EU’s Code of Conduct Group (Business Taxation) in Barbados, Belize, Curaçao, Mauritius, Saint Lucia, and Seychelles with measures of similar effect.

Each letter thanks the respective jurisdiction for its co-operation to date and goes on to state that the changes the jurisdictions have made are either insufficient or that the replacement regimes are also considered harmful and further changes are needed.

The six jurisdictions were ‘grey-listed’ rather than ‘black-listed’ in respect of the EU list of non-cooperative jurisdictions for tax purposes on the basis of their commitments to amend these harmful regimes.

The Council stated that the Code of Conduct Group would not recommend their inclusion on the EU blacklist provided that it received a commitment at a high political level that the jurisdiction will amend or abolish the regime by 31 December 2019, without any grandfathering mechanism, and no other criteria have been failed.

Finally, the letter states that the Code of Conduct Group will accept no further replacement with measures of similar effect or delays when it assesses whether the requested commitments have been implemented at the beginning of 2020.

14 February 2019, the General Court of the European Union held that Belgium’s system of exception for the excess profit of Belgian entities that are part of multinational corporate groups did not constitute illegal state aid. It therefore annulled the Commission’s 2016 decision that ordered Belgium to recover around €700 million in aid granted to 35 multinational companies.

Joined Cases Belgium v Commission (T-131/16) and Magnetrol International v Commission (T-263/16) concerned advance rulings under which profits regarded as being ‘excess’, in that they exceeded the profit that would have been made by comparable standalone entities operating in similar circumstances, were exempted from corporate income tax.

The Belgian tax authorities had granted these rulings since 2005 to Belgian entities that were part of multinational corporate groups that demonstrated the existence of a new situation, such as a reorganisation leading to the relocation of the central entrepreneur to Belgium, the creation of jobs or investments.

The Commission found (Commission Decision (EU) 2016/1699 of 11 January 2016) that this system of excess profit exemptions constituted a State aid scheme that was incompatible with the internal market and unlawful, and ordered the recovery of the aid granted from 55 beneficiaries, including the company Magnetrol International.

Belgium and Magnetrol International brought an action before the General Court seeking the annulment of the Commission’s decision. They alleged inter alia that the Commission had encroached upon Belgium’s exclusive tax jurisdiction in the field of direct taxation and also erred in finding the existence of an aid scheme.

The General Court found that the Commission had erroneously considered that the excess profit exemption system constituted an aid scheme, within the meaning of Article 1(d) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union.

Firstly, the provisions identified by the Commission as the basis of the alleged aid scheme did not set out all the essential elements of that scheme. Accordingly, the implementation of those provisions and therefore the grant of the alleged aid necessarily depended on the adoption of further implementing measures, which precluded the existence of an aid scheme.

Secondly, the General Court found that the Belgian tax authorities had a margin of discretion over all of the essential elements of the exemption system in question, allowing them to influence the amount and the characteristics of the exemption and the conditions under which it was granted, which also precluded the existence of an aid scheme.

Finally, the General Court held that it could not be concluded that the beneficiaries of the alleged aid scheme were defined in a general and abstract manner or that there was actually a systematic approach on the part of the Belgian tax authorities in respect of all the advance rulings concerned.

The Commission had therefore wrongly considered that the Belgian system relating to the excess profit constituted an aid scheme. In annulling the Commission’s decision, however, the General Court noted that while direct taxation falls within the competence of EU member states, they must nonetheless exercise that competence consistently with EU law.

A measure by which the public authorities granted certain undertakings advantageous tax treatment that placed the beneficiaries in a more favourable position than other taxpayers was therefore capable of constituting state aid. Since the Commission was competent to ensure compliance with the state aid rules, it could not be accused of having exceeded its powers in this case.

13 February 2019, the European Commission adopted a new blacklist of 23 third countries that it has identified as having strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.

The blacklist is intended to protect the EU financial system and follows an autonomous assessment to identify high-risk third countries on the basis of a new methodology that reflects the stricter criteria of the Fifth Anti-Money Laundering Directive (5AMLD), which came into force in July 2018.

Banks and other entities covered by EU anti-money laundering rules will be required to apply enhanced due diligence on financial operations involving customers and financial institutions from the listed third countries.

The list was drawn up following analysis of 54 priority jurisdictions, which was published on 13 November 2018. The countries assessed met at least one of the following criteria:

-Systemic impact on the integrity of the EU financial system;

-Reviewed by the International Monetary Fund as international offshore financial centres;

-Economic relevance and strong economic ties with the EU.

For each country, the Commission assessed the level of existing threat, the legal framework and controls put in place to prevent money laundering and terrorist financing risks and their effective implementation. The Commission said it also took into account the work of the Financial Action Task Force (FATF).

The Commission concluded that 23 countries had strategic deficiencies, which included 12 countries already blacklisted by the FATF and 11 additional jurisdictions. Some of the listed countries were on the previous EU blacklist of 16 countries, which it first issued following the entry into force of the Fourth Anti-Money Laundering Directive in 2015.

The new list replaces the most recent list, which has been in place since July 2018, and reflects the broadened criteria under 5AMLD. The decision to list any previously unlisted country, it said, therefore reflects the current assessment of the risks in accordance with the new methodology. It does not mean the situation has deteriorated since the list was last updated.

The 23 jurisdictions listed are: Afghanistan, American Samoa, The Bahamas, Botswana, the Democratic People's Republic of Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad & Tobago, Tunisia, the US Virgin Islands and Yemen.

Commissioner for Justice Věra Jourová said: “We have established the strongest anti-money laundering standards in the world, but we have to make sure that dirty money from other countries does not find its way to our financial system. Dirty money is the lifeblood of organised crime and terrorism. I invite the countries listed to remedy their deficiencies swiftly. The Commission stands ready to work closely with them to address these issues in our mutual interest."

The Commission adopted the list in the form of a Delegated Regulation. It will now be submitted to the European Parliament and Council for approval within one month. If approved, the Delegated Regulation will be published in the Official Journal and will enter into force 20 days after its publication.

The Commission will continue its engagement with the countries identified, especially on the delisting criteria. This list enables the countries concerned to identify the areas for improvement in order to pave the way for a possible delisting once strategic deficiencies are addressed.

The Commission will follow up on progress made by listed countries, continue monitoring those reviewed and will also start assessing additional countries. The Commission will update this list accordingly. It will also reflect on further strengthening its methodology where needed in light of experience gained, with a view to ensuring effective identification of high-risk third countries and the necessary follow-up.

The US Treasury Department said it had significant concerns about the substance of the list and the flawed process by which it was developed, which contrasted starkly with the FATF’s thorough methodology. It does not expect US financial institutions to take the European Commission’s list into account in their AML/CFT policies and procedures.

“First, the Commission’s process did not include a sufficiently in-depth review necessary to conduct an assessment related to such a serious and consequential issue. Second, the Commission provided affected jurisdictions with only a cursory basis for its determination. Third, the Commission notified affected jurisdictions that they would be included on the list only days before issuance. Fourth, the Commission failed to provide affected jurisdictions with any meaningful opportunity to challenge their inclusion or otherwise address issues identified by the Commission.  As a result, the European Commission produced a list that diverges from the FATF list without reasonable support,” it said.

Beyond its concerns about the methodology, the Treasury Department also rejected the inclusion of American Samoa, Guam, Puerto Rico, and the US Virgin Islands on the list. It said the commitments and actions of the US in implementing the FATF standards extended to all US territories.

“The same AML/CFT legal framework that applies to the continental United States also generally applies to US territories. Moreover, the Treasury Department was not provided any meaningful opportunity to discuss with the European Commission its basis for including the listed US territories,” it said.

20 February 2019, Swiss bank UBS was fined €3.7 billion by a criminal court in Paris for aiding tax evasion by wealthy clients in France between the years 2004 and 2012. UBS said it would appeal against the conviction.

After a six-week trial, the court found UBS had illegally laundered proceeds of tax evasion and broken laws on soliciting French customers. The court's president said the faults of UBS were of an “exceptional gravity” and that such faults “find their source in a structured, systemic and long-standing organisation”.

In addition, UBS was ordered to pay €800,000 to the French state in damages and interests. UBS France, the French subsidiary of UBS, was also fined €15 million for complicity and five former directors of UBS were given suspended prison sentences and fines up to €300,000.

The total proposed penalty is less than the €5.3 billion originally demanded by the French state.  It had evaluated the amount of undeclared assets managed by UBS over the period as between €8 billion and €23 billion.

The Paris public prosecutor's office opened a judicial investigation into UBS in 2011, suspecting it of implementing a “double accountancy” system in order to disguise the movement of capital between France and Switzerland. In 2013, UBS France and UBS were accused of soliciting wealthy French citizens at sports events and concerts and encouraging them to open undeclared bank accounts in Switzerland.

In 2014, UBS was indicted for aggravated laundering of the proceeds of tax fraud and bail was set for €1.1 billion, which UBS contested without success in the European Court of Human Rights. The following year, three former UBS directors in charge of wealth in western Europe and France were issued with a French arrest warrant while Raoul Weil, the former chief executive of UBS wealth management, was placed under investigation.

UBS said it “strongly disagrees with the verdict” and would appeal against the decision, which it characterised as “based on the unfounded allegations of former employees” rather than “any concrete evidence”. Under the French legal system an appeal would go to the court of appeals — where it would be retried in its entirety — then on to another higher court.

12 February 2019, Guernsey deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). It will enter into force on 1 June.

The MLI is designed to incorporate the provisions agreed to in the 2015 OECD/G20 base erosion profit shifting (BEPS) project swiftly into existing tax treaties. Guernsey’s definitive list of reservations and notifications to the MLI identifies nine tax treaties that it wishes to be covered by the convention.

Representatives covering a total of 87 jurisdictions now have signed the MLI, and 20 jurisdictions have deposited their instruments of ratification with the OECD.

21 February 2019, New Zealand's official Tax Working Group (TWG) issued its final report on the introduction of capital gains tax (CGT) on a wider class of assets. Its majority decision was that CGT should be imposed on all types of land and improvements except the family home, and on shares, intangible property and business assets.

The TWG was set up in January 2018 by the Labour-led coalition government to create a vision for future tax policy. It was asked to consider a system for taxing capital gains that would improve the tax system.

The members of the group were agreed that CGT should be more widely charged, but were split on how far it should extend. The report suggests the tax be imposed only when an asset changes hands, with rollover treatment for certain life events, such as death and relationship separations, and business reorganisations and small business reinvestment. No discounted tax rate would be allowed, and there would be no allowance for inflation.

Only gains and losses arising after the implementation date would be taxed, with foreign shares continuing to be taxed under the fair dividend rules. The group estimated that its recommendations, if implemented, will raise about NZD8 billion over the first five years.

Finance Minister Grant Robertson and Revenue Minister Stuart Nash said the government would take a measured response and it was highly unlikely that all recommendations would need to be implemented.

“We will seek technical advice on addressing the unfair and unbalanced elements identified by the TWG and make further announcements in April on any measures to enhance the fairness and integrity of the tax system,” Nash said.

The government intends to pass any legislation to implement any policy changes arising from the report before the end of the Parliamentary term. No policy measures will come into force until 1 April 2021.

14 February 2019, the OECD released additional peer review reports assessing countries’ efforts to implement the Action 6 and Action 14 minimum standards as agreed under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.

BEPS Action 6 minimum standard on preventing the granting of treaty benefits in inappropriate circumstances is one of the four BEPS minimum standards that all Inclusive Framework members have committed to implement.

The OECD said the first peer review report on implementation of the Action 6 minimum standard revealed that a large majority of Inclusive Framework members had begun to translate their commitment on treaty shopping into actions and were now in the process of modifying their treaty network.

The report included the aggregate results of the peer review and data on tax treaties concluded by each of the 116 jurisdictions that were members of the BEPS Inclusive Framework on 30 June 2018. The report recognised the substantial progress that jurisdictions had made in 2017 and 2018 towards the implementation of the minimum standard.

The OECD said the results of the peer review also showed the effectiveness of the multilateral instrument (MLI) in implementing the treaty-related BEPS measures. It was by far the preferred tool of Inclusive Framework members for implementing the minimum standard.

The OECD also released the reports of Estonia, Greece, Hungary, Iceland, Romania, Slovak Republic, Slovenia and Turkey under Action 14 – making dispute resolution mechanisms more effective. It said they contained over 200 specific recommendations that will be followed up in Stage 2 of the peer review process.

The OECD will continue to publish Stage 1 peer review reports in accordance with the Action 14 peer review assessment schedule, and the first round of Stage 2 reports are to be published in the coming months. In total, 37 peer reviews have been finalised. The seventh batch of Action 14 peer reviews is underway for eight more countries.

11 February 2019, the Panamanian parliament approved Law 70 of 2019, which elevates tax evasion to a criminal offence. The move was intended to ensure that Panama avoids being blacklisted by international regulators.

The new law in Panama classifies evasion of taxes worth US$300,000 or more in a calendar year as a crime and will impose prison sentences of between two and five years. Those found guilty of the offence will also be liable for charges of between two and ten times the total sum evaded.

Individuals found to have laundered proceeds from tax fraud will also be liable for a prison sentence of between two and four years. Administrative sanctions will be applied where the amount is less than US$300,000.

Despite the introduction of this new law, the European Commission included Panama on its new blacklist of 23 third countries that have been identified as having strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.

The new EU blacklist follows an autonomous assessment to identify high-risk third countries on the basis of a new methodology that reflects the stricter criteria of the EU’s Fifth Anti-Money Laundering Directive (5AMLD), which came into force in July 2018.

18 February 2019, Finance Minister Heng Swee Keat announced in his Budget Statement to Parliament that the ‘Not Ordinarily Resident’ (NOR) scheme, which was introduced in 2002 to attract senior management of global companies, is to be closed next year.

No individuals will be granted NOR status after 2020, although existing NORs who continue to meet the relevant conditions will be allowed to retain it until 2024.

The NOR scheme provides a five-year favourable tax regime to new arrivals who become tax resident. Individuals can only qualify as NORs if they spend at least 90 days a year outside Singapore for business and have a minimum Singapore-sourced employment income of SGD160,000.

Qualifying NORs are not taxed on the portion of their Singapore-sourced employment income that corresponds to the number of days they spend outside Singapore for business reasons in the calendar year. They also benefit from favourable tax treatment of contributions to overseas pension funds.

Heng said Singapore would “continue to build a conducive environment to attract and retain highly-skilled individuals', including through a competitive tax regime.

20 February 2019, the National Treasury announced changes to the foreign employment income tax exemption for South African residents as part of its full Budget Review for 2019.

From 1 March 2020, South African residents who spend more than 183 days in employment outside the country will be subject to South African taxation on any foreign employment income that exceeds R1 million.

To prevent monthly withholding of income tax both in South Africa and the host country, it is proposed that South African employers be allowed to reduce their monthly local pay-as-you-earn (PAYE) withholding by the amount of foreign taxes withheld on the employment income.

Before implementation, a workshop will be held to consult taxpayers on their administrative concerns. Any resulting amendments will be processed during the 2019 legislative cycle.

27 February 2019, the Swiss Federal Council opened a consultation on amending the Federal Act and Ordinance on the International Automatic Exchange of Information in Tax Matters (AEOI) to implement the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Switzerland, which has been implementing the AEOI standard since 1 January 2017, was subject to a peer review by the Global Forum in December. Its recommendations included certain due diligence and registration obligations, the maintenance of a document retention obligation for reporting Swiss financial institutions, as well as definitions.

The consultation will last until 12 June 2019 and the proposal is scheduled for parliamentary debate in spring 2020. The amendments to the law and ordinance should enter into force on 1 January 2021.

11 February 2019, the UK government launched a consultation on the design of a 1% Stamp Duty Land Tax (SDLT) surcharge on non-UK residents purchasing residential property in England and Northern Ireland. This would raise the top rate of SDLT to 16%. The consultation runs to 6 May 2019

The government said it was committed to helping more people into home ownership but there was evidence that purchases of property by non-UK residents were pushing up house prices for UK residents.

The non-UK resident surcharge will apply to purchases of residential property made by non-UK resident individuals and certain non-natural persons. The surcharge will apply to freehold and leasehold purchases of residential property and will be at a rate of 1% on top of all existing SDLT rates, including the rates applicable to the rental element of leasehold property.

No specific reliefs are offered for the new charge but existing reliefs will generally apply as normal. Mixed-use schemes, and purchases of six or more dwellings, will continue to be treated as non-residential and thus not subject to the surcharge. Multiple dwellings relief will also be available, and the minimum rate of 1% of the total amount paid will remain unchanged for those paying the surcharge, giving a 2% minimum effective rate.

Individuals will be regarded as non-resident if they spend fewer than 183 days in the UK in the 12 months immediately prior to the date of the purchase. New or modified tests of residence are to be introduced specifically for the charge. It will apply to UK-resident close companies that are controlled by non-UK resident shareholders, as well as some partnerships and trusts.

Responses to the consultation are due by 6 May. The new residence rules will be incorporated in a future Finance Bill.

7 February 2019, a District Judge at City of London Magistrates Court granted forfeiture orders on £466,321.72 in three frozen bank accounts belonging to Vlad Luca Filat, the 22-year-old student son of the former Prime Minister of Moldova.

Freezing orders on the HSBC accounts were granted last May under new forfeiture provisions introduced by the Criminal Finances Act 2017 after National Crime Agency (NCA) financial investigators suspected that the funds derived from illegal activities.

Vladimir Filat is currently serving a nine-year prison sentence in Moldova after he was convicted in June 2016 for his part in the disappearance of US$1 billion from three Moldovan banks.

With no registered income in the UK, HSBC records showed that his son’s accounts and living expenses were being funded by large deposits from overseas companies, mainly based in Turkey and the Cayman Islands. Multiple cash deposits were also identified across the UK branch network, with £98,100 paid in over one three-day period.

After moving to London in July 2016 to begin his studies, Filat led an extravagant lifestyle, spending significant sums of money on luxury goods and services. This included the purchase of a £200,000 Bentley motorcar from a Mayfair dealership and paying £390,000 up front in rent for an apartment in Knightsbridge.

Granting the forfeiture orders, District Judge Michael Snow said: “I am satisfied on the balance of probabilities that the cash was derived from his father’s criminal conduct in Moldova.”

A spokesman from the NCA’s International Corruption Unit said: “Account Freezing Orders are a valuable tool in the fight against illicit finance in the UK. Where we suspect money in an account is the proceeds of crime, we can apply to the court to freeze and then forfeit the sums. In this case, Vlad Luca Filat was unable to demonstrate a legitimate source for the money and the court determined it to be recoverable.”

28 February 2019, US Treasury secretary Steven Mnuchin and French finance minister Bruno Le Maire announced they were accelerating talks at the OECD for a global tax reform this year to ensure that tech companies pay reasonable levels of corporation tax in the countries where they operate.

France has been examining ways to generate more tax receipts from digital and tech companies where they make their sales, rather than where taxes are low and employees, offices and other corporate assets are located.

After failing to secure agreement at the EU level, France is due to introduce a national tax on the local revenues of digital companies such as Facebook and Amazon shortly. Mnuchin said he opposed the French tax and said the issue went beyond digital companies.

“We’ve both instructed our teams at the OECD to try to have this issue resolved,” said Mnuchin. “We are very much looking forward to the position of France that if there is a global solution at the OECD, that that would replace [the French tax], so we are hopeful that we can resolve this issue this year together.”

“We can find a new agreement so that there is a common Europe position at the OECD and, with the support of the US, we can have digital taxation proposed at the international level at the OECD between now and the end of 2019,” said Le Maire.

Mnuchin and Le Maire also agreed on the need for an internationally adopted minimum level of corporation tax, which is being discussed by the G7 group of countries. “That’s something we absolutely support,” said Mnuchin.

The French division of US tech giant Apple confirmed on 5 February that it had reached agreement with the French tax authorities to pay an undeclared amount of back-dated tax, estimated at around €500 million.

“As a multinational company, Apple is regularly audited by fiscal authorities around the world,” Apple France said in a statement. “The French tax administration recently concluded a multi-year audit on the company’s French accounts, and those details will be published in our public accounts.”