In time for the election

Whether corporations like Google will actually pay much more taxes in Europe soon, as proponents of new tax rules hope, will not be known for a few years. From the point of view of Finance Minister Scholz, it is better that way.

Corporations like Google and Amazon have employed an army of lawyers and tax lawyers.  You have driven tax avoidance to perfection.

SO delighted, downright enthusiastic, you don’t see Olaf Scholz every day. He is happy on Friday, speaks of a great day and shouts: “We can do it.” Of course, the SPD politician does not look so happily at the federal election, for the representative of a 15 percent party such words would be presumptuous in this context . Scholz only praises the progress made in working on the new world tax system.

Almost 140 countries have been trying for years to find a compromise under the umbrella of the industrial countries organization OECD. A new push on the minimum tax has now come from America; it has made the German minister so euphoric. After that, the Washington government moves away from its first, unrealistic call for a rate of 21 percent. You would now be satisfied with 15 percent. This makes it easier to reach an agreement with countries like Ireland, which have hitherto relied on tax competition.

A successful conclusion of the negotiations would be important for the SPD candidate for chancellor. So far, the finance minister has achieved little in tax policy: the reform of the property tax was laborious and not very glorious; Most countries don’t give a damn about the federal model, use the opening clause and go their own way. Scholz overslept the big issue of pension taxation. Now, of all things, an unpleasant judgment could come for him during the election campaign, should the Federal Fiscal Court criticize the double taxation of contributions and pensions. In terms of the financial transaction tax, on the other hand, nothing happened, although Scholz repeatedly promised its introduction.

Scholz has two dates firmly in view: on the one hand, the meeting with his colleagues from the group of the twenty large economic areas, which – if the pandemic permits – will be in Venice at the beginning of July; on the other hand the general election at the end of September. The breakthrough to the new tax world would be gold for him. It will not be known until years later whether Google and other data companies will really pay much more taxes in Europe, as proponents of the new regulation are hoping. From Scholz’s point of view, it is better that way, otherwise the disappointment could be great. That is why a decision shortly before the election is ideal for him.