[ad_1]
Advanced G7 economies have called what they have called a “historic agreement” on the taxation of multinationals with the aim of creating an unstoppable push for a global agreement.
A statement issued on Saturday showed that the US, Japan, Germany, France, the UK, Italy and Canada had found enough commitment to stop companies from taking profits to low-tax jurisdictions and to act as larger multinationals to pay more taxes.
The agreement was denounced by finance ministers and represents a significant step forward in the negotiations that began in 2013.
Rishi Suna, the chancellor of the United Kingdom, has welcomed the agreement as chairman of the group this year. “My financial counterpart and I have reached a historic agreement on global tax reform that requires the largest multinational technology giants to pay a direct share of the tax they have in the UK,” he said.
The UK’s priority in the talks has been to raise more revenue from companies like Apple, Google and Facebook.
Sunak’s excitement was shared by other G7 finance ministers. U.S. Treasury Secretary Janet Yellen said the deal is a “significant unprecedented commitment” to the corporate tax rate of at least 15 percent, which will significantly increase corporate tax revenue in the U.S.
German Finance Minister Olaf Scholz said the deal was “very good news for tax justice and solidarity and bad news for tax havens around the world.”
Bruno Le Maire, his French counterpart, said the G7 country had “met the challenge of this historic moment” by saying that the agreement paved the way for a global agreement at the G20 in Venice in July.
Details of the first part of the agreement, the Biden administration’s significant concession to the U.S., made it clear that “the world’s largest companies with a profit margin of at least 10 percent” should focus their 20 percent in the future. global profits to countries that make sales.
If established, it would dominate the tax on international corporations, with profits taxed only in places where companies have a physical presence.
The definition of the largest companies in the world is yet to be determined. This part of the deal will require a global deal this year.
In exchange for this concession, the US has reached an agreement with the rest of the G7 countries to set an overall corporate tax rate for each country. at least 15 percent.
This will reduce the incentive for large companies to declare profits such as Ireland in tax havens or low-tax jurisdictions, as the country where the company is headquartered will be able to charge corporate tax payments to the global minimum effective level.
The US is expected to be the biggest beneficiary of this second pillar of the agreement.
It was debated on Friday night whether the deal would set a global minimum of 15 per cent or “at least” 15 per cent, including France’s bid to raise more revenue from the company’s highest rates.
One of the most controversial issues has been the US request for France, the United Kingdom and Italy to lower new digital taxes in exchange for acquiring tax rights under the agreement. U.S. Treasury Secretary Janet Yellen wanted that to happen immediately, while European countries stressed that they would eliminate these taxes after closing and ratifying any global agreement.
The communication showed that this part of the agreement was yet to be tied to specific commitments. “We will provide proper coordination between the application of the new international tax rules and the elimination of all Taxes on Digital Services, and other similar important measures, to all companies,” he said.
[ad_2]
Source link
