G7: Rich nations back deal to tax multinationalson June 5, 2021 at 11:33 am

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

G7 finance ministers have agreed to work together to create a “level playing field” on global taxation.

UK chancellor Rishi Sunak (left)) talking to Canadian Finance Minister Chrystia Freeland (right) at the G7 meeting in London, 4 June 2021

image copyrightGetty Images

The G7 group of advanced economies has reached a “historic” deal on taxing multi-national companies, the UK’s Chancellor of the Exchequer, Rishi Sunak says.

Finance ministers meeting in London agreed to commit to the principle of a minimum corporate tax rate of 15%.

Tech giants such as Amazon and Google could be among the companies affected.

The move could see billions of dollars flow to governments to pay off debts incurred during the Covid crisis.

Mr Sunak said the agreement was designed to create a level playing field for global companies.

“After years of discussion, G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age,” he said.

Governments have long grappled with the challenge of taxing global companies operating across many countries.

That challenge has grown with the boom in huge tech corporations like Amazon and Facebook.

At the moment companies can set up local branches in countries that have relatively low corporate tax rates and declare profits there.

That means they only pay the local rate of tax, even if the profits mainly come from sales made elsewhere. This is legal and commonly done.

The deal aims to stop this from happening in two ways.

Firstly, the G7 want a global minimum tax rate so as to avoid a “race to the bottom” where countries can undercut each other with low tax rates.

Secondly, the rules will aim to make companies pay tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits.

- Advertisement -




Ethiopian migrants face robbery, extortion and starvationon June 13, 2021 at 11:06 pm

Every year thousands of migrants risk it all on the perilous journey from Ethiopia to Saudi Arabia.Every year tens of thousands of Ethiopians begin...

Israel Gaza violence: US envoy arrives for de-escalation talkson May 15, 2021 at 3:47 am

Appeals to Israeli and Palestinian leaders for calm have so far failed to produce a ceasefire agreement.image copyrightReutersA US envoy has arrived in Tel...

Tesla prepared to move out of California amid fight over factory shutdown, Musk tweets

KEY POINTS Elon Musk tweeted on Saturday that he is going to sue Alameda County and move future operations out of California after a...

UK economy suffered record annual slump in 2020on February 12, 2021 at 9:48 am

The size of the economy shrank by 9.9% in 2020, the largest annual fall on record, official figures show.The UK economy shrank by a...

Asos ‘rips up the playbook’ for pandemic booston April 8, 2021 at 9:36 am

Sales and profits soar at the online fashion group, which now has 25 million customers around the world.Sales and profits soar at the online...