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The UK supports Joe Biden’s minimum global business tax

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Rishi Sunak is backing Joe Biden’s plans for a 21 per cent global tax on global business, as Britain pushes the US to make any deal more fair for taxing digital technology giants.

The chancellor, who heads the G7 finance ministers, said he would consider a global minimum tax as part of a broader package because Treasury officials fear Biden will force technology companies to pay taxes “when the UK should pay in California”.

Sun has come under pressure from Labor to approve US plan for 21 percent Global minimum rate of Corporation Tax. Shadow Foreign Secretary Lisa Nandy has complained that Britain is showing doubts, not leadership.

But the chancellor’s allies argued that support for the Biden plan would fall into the hands of Washington, which wants an early deal to achieve a global minimum tax rate, at least not for the US president. increased corporate tax rates to 25-28 percent.

British officials feared the US would not accept the radical enough shaking global tax rules – from the 1920s – to reflect where multinationals make sales, rather than where the groups have a physical presence.

The UK was also concerned that the Biden administration would support a global agreement falter in Congress, Leaving the UK high and dry.

Negotiations are underway to renew global taxation at the OECD and G20 levels, and the issue is likely to emerge when G7 finance ministers meet in London on 4 June.

Mike Williams, the Treasury’s director of business and international taxation, spoke at an online conference at the University of Oxford’s Business Tax Center that the agreement, which only examined the global minimum tax, was not politically acceptable.

“The basic proposition in the UK is that we need to solve the digital tax problem, we have been working on it for years,” he said.

Presented by Great Britain digital sales tax, which is expected to raise around £ 500 million a year among major US tech companies by 2024-5.

“It’s not primarily a minimum tax,” Williams said. “Minimum taxes can help (while they operate) companies pay taxes, but it’s also important where taxes are paid.”

“When it comes to offering children’s schools in Coventry, it’s not very helpful if you pay more tax in California when you have to pay in the UK,” he added.

But he is ready to make a deal that covers Britain The two pillars of the Biden plan global tax review: global digital tax and global minimum tax rate for multinationals.

The rector said at a summit of the Wall Street Journal last week that digital taxation was a priority for the UK: “Finding a way to tax large international digital companies in the right and fair way.” He has promised to abolish the digital sales tax in the UK if a multinational agreement is agreed.

Sun also said that the minimum 21 percent corporate tax is “higher than where the previous discussions were,” but that it is open to discussion. Ireland, with a rate of 12.5 per cent, is strongly opposed; Sun is set The rate in the UK has risen to 25 percent by 2023.

According to Nandy, the Biden initiative on the global minimum tax rate was a historic opportunity. Rachel Reeves is working with shadow chancellor to push for Sunas to put on the agenda at a G7 summit in Cornwall next month. “We need to avoid running downhill,” he said.

Robert Palmer, director of the Tax Justice UK campaign team, has called on the UK to support the Biden plan, saying the current stance is “not looking good” for the government, which has said it wants it to. deal with tax avoidance.

Although the deal on the table was “not perfect,” the minimum corporate tax rate of 21 percent would be a “game changer” to stop companies from paying “very low” tax rates, he said.

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