Global negotiators have continued to wrangle over a US proposal to fix a minimum threshold for the levy of a uniform global corporate tax that is designed to ensure that technology giants like Amazon and Facebook pay legitimate taxes on the revenues they earn in the jurisdictions in which they operate.

On Wednesday, the Biden administration announced retaliatory tariffs against six countries, including India, that intend to slap a so-called digital tax. But the US delayed the imposition of the levies by 180 days to allow global negotiators to hammer out an agreement in the discussions that are being held under the aegis of the Organisation for Economic Cooperation and Development (OECD).

The US has proposed that the global tax should be imposed only on multinational corporations that have revenues in excess of $20 billion — a threshold that negotiators from Europe and India are refusing to accept as it will limit the scope of the levy to just 100 companies.

A bigger flashpoint is another proposal to bring companies only above a profitability threshold within the tax net, meaning low-margin players such as Amazon may be let off the hook.

All this means the ongoing tax talks in Paris among the 140-nation Organisation for Economic Co-operation and Development may stretch for a longer period than the six-month window provided by the US on Wednesday to India, Austria, Italy, Spain, Turkey and the UK to suspend the retaliatory tariffs.

US President Jo Biden is pushing for a global minimum corporate tax of at least 15 per cent, although key aspects such as the actual rate as well as the threshold for companies to come under the tax net remain to be decided.

The tax talks in Paris focus on two pillars: One is a global minimum to prevent multinationals from using complex legal and accounting schemes to move profits to low-tax countries where they do little or no business.

The second is finding a way to tax companies — particularly Internet-based ones — that may reap profits in countries where they have no physical presence and thus pay no tax.

On the suspension of the retaliatory tariffs, trade economist Biswajit Dhar of JNU said the US was sending a clearsignal that it wants to engage in the

global forum, which it had quit twice in the past. “The move by Washington should be seen in the context of G-7 also taking up the digital services tax (DST). Retaliatory action by the US in the past did not deter many nations from going ahead with the DST. It seems that Washington plans to engage in a global forum and protect the interest of tech firms, most of which are based in America.”