Bloomberg Law Quotes Peter Barnes on UN Tax Talks

European countries are actively participating in a United Nations effort to ensure developing economies have a stronger footing to tax remote and digital businesses—an endeavor fervently opposed by the Trump administration.

They have expanded their engagement in the UN talks over a year and a half of discussions, despite initially siding with the US in trying to keep the negotiations from getting off the ground. Germany, France, Estonia, and Belgium were among the most active participants at meetings in New York and Nairobi, and have been key players in closed-door work among negotiators.

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Part of the EU’s increased UN engagement is the result of the transatlantic alliance unraveling, according to a person familiar with the matter. With the US an unreliable partner, the faith EU countries put in the OECD has been shaken, the person said.

Pahapill, the Estonian negotiator, said the negotiations will increase the leverage developing countries will have in future tax treaties regardless of whether Europe signs up. European countries need to engage, she said, if they want to win support and get a final deal that reflects their views.

The UN has gained momentum because of the OECD’s failure to be inclusive, Peter Barnes, international tax adviser and counsel at Caplin & Drysdale, said at the May Pacific Rim conference. It’s absolutely essential for the US to be involved, he said.

“I think the US is making a huge, huge mistake if it steps back from the UN,” Barnes said.For the full article, please visit Bloomberg Law’s website (subscription required).