15 C
Ontario
Monday, October 25, 2021

Apple, Google, Amazon, Other Tech Giants May Have to Pay Much Higher Taxes as G7 Nations Reach Landmark Deal


The United States, Britain, and other leading nations reached a landmark deal on Saturday to pursue higher global taxation on multinational businesses such as Google, Apple, and Amazon. In a move that could raise hundreds of billions of dollars to help them cope with the aftermath of COVID-19, the Group of Seven large advanced economies agreed to back a minimum global corporate rate of at least 15 percent and for companies to pay more tax in the markets where they sell goods and services.

“G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age,” British finance minister Rishi Sunak said after chairing a two-day meeting in London.

US Treasury Secretary Janet Yellen said the “significant, unprecedented commitment” would end what she called a race to the bottom on global taxation.

The deal, which was years in the making, also promises to end national digital services taxes levied by Britain and other European countries which the United States said unfairly targeted U.S. technology giants.

However, the measures will first need to find broader agreement at a meeting of the G20 – which includes a number of emerging economies – due to take place next month in Venice.

“It’s complicated and this is a first step,” Sunak said.

The ministers also agreed to move towards making companies declare their environmental impact in a more standard way so investors can decided more easily whether to fund them, a key goal for Britain.

Rich nations have struggled for years to agree a way to raise more revenue from large multinationals such as Google, Amazon, and Facebook, which often book profits in jurisdictions where they pay little or no tax.

US President Joe Biden’s administration gave the stalled talks fresh impetus by proposing a minimum global corporation tax rate of 15 percent, above the level in countries such as Ireland but below the lowest level in the G7.

Germany and France also welcomed the agreement, although French Finance Minister Bruno Le Maire said he would fight for a higher global minimum corporate tax rate than 15 percent, which he described as a “starting point”.

German finance minister Olaf Scholz said the deal was “bad news for tax havens around the world”.

“Companies will no longer be in a position to dodge their tax obligations by booking their profits in the lowest-tax countries,” he added.

Irish finance minister Paschal Donohoe, whose country is potentially a big loser with its 12.5% tax rate, said any global deal also needed to take account of smaller nations.

Sunak said the deal was a “huge prize” for taxpayers, but it was too soon to know how much money it would raise for Britain.

The agreement does not make clear exactly which businesses will be covered by the rules, referring only to “the largest and most profitable multinational enterprises”.

European countries have feared that a business such as Amazon could slip through the net as it reports lower profit margins than most other well-known technology companies.

© Thomson Reuters 2021


Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.



Source link

Latest news

‘Let us dance’: Event organizers contend with cancellations due to no dancing rules

Live event organizers and entertainers claim many big-revenue clients have been cancelling live event bookings in large numbers after newly-announced provincial guidelines lifted...

Neha Kakkar shares ‘surreal’ photos from first wedding anniversary celebration

Singer Neha Kakkar on Monday shared a lovely glimpse of her first wedding anniversary celebration on Instagram. The beautiful pictures featured Neha along with...

Jobs, COVID-19 on the agenda as fall Alberta legislature sitting set to begin

By Staff The Canadian Press Posted October 25, 2021 9:34 am     Updated October 25, 2021 9:37 am Smaller font Descrease article font...

T20 World Cup | After historic high against India, Pakistan takes on New Zealand

Babar's team would be eyeing another big scalp in New Zealand, the team which recently withdrew from a scheduled series against Pakistan after...
Related news

‘Let us dance’: Event organizers contend with cancellations due to no dancing rules

Live event organizers and entertainers claim many big-revenue clients have been cancelling live event bookings in large numbers after newly-announced provincial guidelines lifted...

Neha Kakkar shares ‘surreal’ photos from first wedding anniversary celebration

Singer Neha Kakkar on Monday shared a lovely glimpse of her first wedding anniversary celebration on Instagram. The beautiful pictures featured Neha along with...

Jobs, COVID-19 on the agenda as fall Alberta legislature sitting set to begin

By Staff The Canadian Press Posted October 25, 2021 9:34 am     Updated October 25, 2021 9:37 am Smaller font Descrease article font...

T20 World Cup | After historic high against India, Pakistan takes on New Zealand

Babar's team would be eyeing another big scalp in New Zealand, the team which recently withdrew from a scheduled series against Pakistan after...