France seeks support for minimum corporate tax at world level

France called on Thursday for a new global system of taxation, including a tax on digital giants, as governments look to prevent companies from shopping around for tax havens.

Finance Minister Bruno Le Maire said the Group of Seven (G7), of which France holds the rotating presidency, should consider setting a joint minimum corporate tax and tackle the power of giant multinational corporations.

Le Maire said he had discussed the issue with his U.S. counterpart, Treasury Secretary Steven Mnuchin. The tax would be aimed at eliminating imbalances between the amount small and big companies pay.

“There is a common understanding among all G7 members that we need a new taxation system,” he said at the World Economic Forum in the Swiss ski resort of Davos.

This new global system, he said, should include a tax on digital multinationals that France is pushing to introduce within the European Union and then at the G7 level.

“We will put on the table the idea of a fair taxation of Internet giants,” he told Reuters TV in an interview.

However, EU finance ministers failed to agree a tax on digital revenues in December, despite a last-minute Franco-German plan to salvage the proposal by narrowing its focus to companies like Google and Facebook.

The EU’s executive arm last year proposed a 3 percent tax on big digital firms’ online revenues, alleging the companies funneled profit through states with the lowest tax rates.

But that proposal needs the backing of all 28 EU member states, including small, low-tax countries like Ireland which have benefited by allowing multinationals to book profits there on digital sales to customers elsewhere in the EU.

Le Maire has since said a deal could be reached by the end of March. The French government has invested considerable political capital in the initiative, which is seen in Paris as a useful example of joint European action before EU parliament elections in May.

Le Maire said France also wants the G7 - which also includes the United States, Japan, Germany, Britain, Italy and Canada - to introduce new rules forcing companies to report their highest and lowest wages to reduce the pay gap and help address social inequalities.