Tech Giants, Taxes, and a Looming Global Trade War
The gap between tech giants' soaring profits and governments' tax shortfalls is making digital taxation a flashpoint that could trigger a global trade war.
Summary
Govindarajan and co-authors trace the dispute over digital services taxes, such as France's 3% levy and US tariff threats. Pandemic spending and falling revenues make governments more determined to tax digital profits. The authors analyze how tech firms' intangible-heavy models allow them to book profits in low-tax jurisdictions. They argue only multilateral collaboration can avert escalation.
Editor's opinion
The gap between tech giants' soaring profits and governments' tax shortfalls is making digital taxation a flashpoint that could trigger a global trade war.
Key concepts
Digital services taxes · Tax base erosion · Trade conflict