France eager to have corporation tax discussed at Lough Erne summit

The French feel strongly about one particular aspect of the three Ts – trade, tax and transparency – that British prime minister David Cameron has made the theme of next week's G8 summit.

"When a company earns profits in France, but pays its corporate tax in a country with a very low rate, we find it unjust," says a high-ranking official, in an obvious allusion to Google. Paris claims Google earns up to €1.5 billion in advertising in France each year, but pays just .003 per cent tax.

In the same breath, the official volunteered that Taoiseach Enda Kenny will attend the G8 summit’s closing luncheon on June 18th. “We know that Ireland has set a very low tax rate . . . At what point do you call it a tax haven?”

However, Ireland will not be singled out for criticism at Lough Erne, the official promised. "It's not a game of name and shame. The problem of taxing the digital economy is far bigger than one country . . . We must find a framework in which companies like Google pay a reasonable amount of tax somewhere. It requires unanimity."

Base tax rate
France advocates a base rate of corporate tax that would apply to all countries, thus eliminating tax havens.

Tomorrow in Brussels, trade ministers will discuss the EU's mandate for negotiations with the US for transatlantic trade talks, but the subject will be revisited at the G8. France insists its exception culturelle – support for French cinema, television and music – is not subject to negotiation. Washington wants cultural industries to be included, but 16 EU countries have sided with France.

Terrorist strongholds
G8 leaders will also discuss foreign policy issues, including Syria, Libya, North Korea and Iran. Mr Cameron is seeking a joint declaration that none of the eight countries will pay ransom to hostage-takers. France wants to talk about the risk of resurgence of "terrorist strongholds" in southern Libya, and about Mali, where it dispatched troops earlier this year.

In their one-on-one meeting at Lough Erne, French president François Hollande will ask Russian president Vladimir Putin to put pressure on Syria to participate in a peace conference in Geneva this summer. "Geneva 2" would be the continuation of the conference that was aborted a year ago. France wants Geneva 2 to establish a transitional government, but will not accept that the extremist Al-Nusra Front be part of it.

“It will be difficult to reach consensus on Syria,” an official predicts. The G8 will discuss an international response to the use of chemical weapons in the conflict, which Moscow denies. “It’s easy to sit in an armchair and criticise the Russian attitude,” an official says. “But that won’t move things forward.”