Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Mar 29, 2024

'Historic' G7 deal to stop global corporate tax avoidance welcomed by tech giants Google and Facebook

'Historic' G7 deal to stop global corporate tax avoidance welcomed by tech giants Google and Facebook

"It's a proud moment," says Chancellor Rishi Sunak as G7 finance ministers commit to a global minimum tax of at least 15%.


Google and Facebook have welcomed a G7 deal on tackling corporate tax avoidance by big tech companies.

The agreement will see a global minimum corporate tax of at least 15% - lower than a floor of 21% mooted by President Biden - and changes to which countries will benefit.

Chancellor Rishi Sunak called the deal "a proud moment".

Speaking after two days of talks in London, he added it "meant the right companies pay the right tax in the right places".

The changes would ensure major corporations, especially those with a strong online presence, will pay taxes in the countries where they operate and not only where they have headquarters.

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.

After the announcement Nick Clegg, vice president of global affairs at Facebook said: "We want the international tax reform process to succeed and recognize this could mean Facebook paying more tax, and in different places."


A Google spokesperson said the company strongly supports the initiative and hoped for a "balanced and durable" agreement.

Sky's economics and data editor Ed Conway said: "This is about trying to prevent billions of dollars, if not trillions, of tax avoidance by the world's biggest companies.

"At the moment taxes are mostly based on profit but you can shift those profits far more easily than you can your sales".

Companies with a profit margin over 10% would have a portion of tax taken above that level, which is then reallocated on the basis of sales to different countries around the world.

"That is equally, if not more of a big deal, than the global minimum," Conway added.

"Put those two things together and you have perhaps the most convincing attempt at trying to deal internationally with what's going on with the tech giants and their tax payments.

"The work to try and get this done has been going on for some years, if not decades.

"On the other hand it's easy to be sceptical and the rate - 15% - is a lot lower than it was originally expected to be. It was originally going to be 21%, so the target is less ambitious."

A Treasury spokeswoman explained that the most profitable multinationals would have to pay tax in the countries where they operate and not just where their headquarters are.

"The fairer system will mean the UK will raise more tax revenue from large multinationals and help pay for public services here in the UK," she said.

Mr Sunak said there had been "huge progress" on an issue that had been discussed for nearly a decade.

The agreement is now set to be looked over in more detail at the G20 financial ministers and Central Bank governors meeting in July.

Chancellor Rishi Sunak at a meeting of finance ministers from across the G7 nations


The deal is likely to cause tensions with Ireland, as it has so far been unwilling to raise its corporation tax rate above 12.5%.

Ireland's finance minister Paschal Donohoe tweeted: "I note the joint position by #G7 finance ministers on international corporate taxation. It is in everyone's interest to achieve a sustainable, ambitious and equitable agreement on the international tax architecture.

"I look forward now to engaging in the discussions at @OECD. There are 139 countries at the table, and any agreement will have to meet the needs of small and large countries, developed and developing."

Meanwhile, Labour called on the government to push for more than the 15% base rate, after US President Joe Biden had initially wanted a 21% minimum, which the party said would raise £131m for public services.

"This government must now show leadership, push for a 21% rate in negotiations, and use the money to fund our schools and our NHS," said shadow chancellor Rachel Reeves.

The Adam Smith Institute - a pro-free market think tank - said the chancellor had effectively tied his own hands while handing "power over our taxes to Washington's demands".

"These proposals are not in the UK's interest and Rishi has sold Britain short," said deputy director Matt Kilcoyne.

"Rishi Sunak's flagship policies of super deductions and free ports are dead in the water. The chancellor's own policies, scuppered by his own hubris."

Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×