Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

The G-7 Nations Agree To Make Big Tech Companies Pay Their Fair Share Of Taxes

The wealthy democracies agree to support a global minimum corporate tax rate of at least 15% to deter multinational companies from avoiding taxes by stashing profits in low-rate countries. It sounds good, but no worries. It’s not going to happen anytime soon, if at all.
The Group of Seven wealthy democracies agreed Saturday to support a global minimum corporate tax rate of at least 15% in order to deter multinational companies from avoiding taxes by stashing profits in low-rate countries.

G-7 finance ministers meeting in London also endorsed proposals to make the world's biggest companies — including U.S. based tech giants — pay tax in countries where they have lots of sales but no physical headquarters.

Britain's Treasury chief Rishi Sunak, the meeting's host, said the deal would "reform the global tax system to make it fit for the global digital age and crucially to make sure that it's fair, so that the right companies pay the right tax in the right places."

U.S. Treasury Secretary Janet Yellen, who attended the London meetings, said the agreement "provides tremendous momentum" towards reaching a global deal that "would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world."

The meeting of finance ministers came ahead of an annual summit of G-7 leaders scheduled for June 11-13 in Carbis Bay, Cornwall. The U.K. is hosting both sets of meetings because it holds the group's rotating presidency.

The endorsement from the G-7 could help build momentum for a deal in wider talks among more than 140 countries being held in Paris as well as a Group of 20 finance ministers meeting in Venice in July.

The G-7 has also been facing pressure to provide vaccines for low-income countries facing new surges of COVID-19 infections and to finance projects to combat climate change. Saturday's statement said only that the members welcomed increased funding commitments by member countries and looked forward to more.

International discussions on the tax issue gained momentum after U.S. President Joe Biden backed the idea of a global minimum of at least 15% on corporate profits.

The tax proposals endorsed Saturday have two main parts. The first part lets countries tax a share of the profits earned by companies that have no physical presence but have substantial sales, for instance through selling digital advertising. The G-7 statement echoes a U.S. proposal to simply let countries tax part of the earnings of the largest and most profitable companies — digital or not — if they are doing business within their borders. The G-7 statement supported awarding countries the right to tax 20% or more of profit exceeding a 10% profit margin.

Part of the agreement is that countries such as France that have imposed digital services taxes would remove those unilateral taxes in favor of the global agreement. The U.S. considers those digital taxes to be unfair trade measures that single out the big U.S. tech companies such as Google, Amazon and Facebook.

The other main part of the proposal is for countries to tax their home companies' overseas profits at a rate of at least 15%. That would deter the practice of using accounting schemes to shift profits to a few very low-tax countries.

Nations have been grappling with the question of how to deter companies from legally avoiding paying taxes by resorting to tax havens — typically small countries that entice companies with low or zero taxes, even though the firms do little actual business there.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
U.S. and Hungarian Officials Talk About Economic Collaboration and Sanctions Strategy
Technology Giants Activate Lobbying Campaigns Against Strict EU Regulations
Pope Francis Admitted to Hospital in Rome Amid Increasing Speculation on Succession
Zelensky Calls on World Leaders to Back Peace as Tensions Rise with Trump
UK Leader Keir Starmer Calls for US Security Guarantee in Ukraine Peace Deal
NATO Chief Urges Higher Defense Expenditure in Europe
The negotiation teams of Trump and Putin meet directly, establishing the groundwork for a significant advancement.
Rubio Touches Down in Riyadh Before Key U.S.-Russia Discussions
Students in Serbian universities Unite to Hold Coordinated Protests for Accountability.
US State Department Removes Taiwan Independence Statement from Website
Abolishing opposition won't protect Germany from Nazism—this is precisely what led Germany to become Nazi!
Transatlantic Gold Rush: Traders Shift Bullion in Response to Tariff Anxieties and Market Instability
Bill Ackman Backs Uber as the Company Shifts Towards Profitability
AI Titans Challenge Nvidia's Supremacy in Light of New Chip Innovations
US and Russian Officials to Meet in Saudi Arabia Over Ending Ukraine Conflict. Ukraine and European leaders – who profit from this war – excluded from the negotiations.
Macron Calls for Urgent Summit as Ukraine Conflict Business Model is Threatened
Trump’s Defense Secretary: Ukraine Won’t Join NATO or Regain Lost Territories
Zelensky Urges Europe to Bolster Its Military in Light of Uncertain US Backing
Chinese Zoo Confesses to Dyeing Donkeys to Look Like Zebras
Elon Musk is Sherlock Holmes - Movie Trailer Parody featuring Donald Trump's Detective
Trump's Greenland Suggestion Sparks Sovereignty Discussions Amid Historical Grievances
OpenAI Board Dismisses Elon Musk's Offer to Acquire the Company.
USAID Uncovered: American Taxpayer Funds Leveraged to Erode Democracy in Europe Until Trump Put a Stop to It.
JD Vance and Scholz Did Not Come Together at the Munich Security Conference.
EU Official Participates in Discussions in Washington Amid Trade Strains
Qatar Contemplates Reducing French Investments Due to PSG Chief Investigation
Germany's Green Agenda Encounters Ambiguity Before Elections
Trump Did Not Notify Germany's Scholz About His Ukraine Peace Proposal.
Munich Car Attack Escalates Migration Discourse Before German Elections
NATO Allies Split on Trump's Proposal for 5% Defense Spending Increase
European Parliament Advocates for Encrypted Messaging to Ensure Secure Communications
Trump's Defense Spending Goal Creates Division Among NATO Partners
French Prime Minister Bayrou Navigates a Challenging Path Amid Budget Preservation and Immigration Discourse
Steering Through the Updated Hierarchy at the European Commission
Parliamentarian Calls for Preservation of AI Liability Directive
Mark Rutte Calls on NATO Allies to Increase Defence Expenditures
Dresden Marks the 80th Anniversary of the World War II Bombing.
Global Community Pledges to Aid Syria's Political Transition
EU Allocates €200 Billion for AI Investments, Introduces €20 Billion Fund for Gigafactories
EU Recognizes Its Inability to Close the USAID Funding Shortfall Due to Stalled US Aid
Commission President von der Leyen Missing from Notre Dame Reopening Due to Last-Minute Cancellation
EU Officializes Disinformation Code for Online Platforms, Omitting X
EU Fails to Fully Implement Key Cybersecurity Directives
EU Under Fire for Simplification Discussions Regarding Corporate Sustainability Reporting
Shein Encountering Further Information Request from the EU During Ongoing Investigation
European Commission Initiates Investigation into Shein as It Aims at Chinese E-Commerce Regulations
German Officials Respond to U.S. Proposal for Peace Talks with Russia
Senate Approves Robert F. Kennedy Jr. as Secretary of Health and Human Services.
Trump and Putin Engage in Discussions on Ukraine Peace Negotiations Amid Worldwide Responses
Honda and Nissan End Merger Talks
×