The G7 finance ministers have agreed to the idea of imposing a global minimum income tax on large corporations. Country representatives are convinced that the reform will effectively dissuade giants such as Google, Facebook, Apple and Amazon from avoiding taxes.
The G7 nations have reached a landmark agreement on a global corporate income tax minimum of 15%. Its purpose is to get tech giants to pay their taxes wherever they earn. The global tribute is expected to bring in $60-80 billion and thus help recover from the economic crisis caused by the coronavirus pandemic.
According to the approved rules, the fee will affect international companies with margins of at least 10%.
Britain’s Chancellor of the Exchequer, Rishi Sunak, said it was a historic decision fit for the “digital age”. German Finance Minister Olaf Schulz called the deal “bad news for tax havens”. Businesses will not be able to escape paying taxes by shifting profits to countries with lower taxes – He said.
Treasury President Janet Yellen said the tax would end a “race to the bottom” on CIT rates and provide “fairness to the middle class and workers in the United States and around the world.”
As explained by Nicodim Szewczyk for eye.pressThe reform means that corporate profits will be taxed at 15% regardless of the legal jurisdiction in which they are registered. “This means that states will be able to tax domestic corporate profits generated abroad, if they originate in a country where the effective CIT rate is less than the minimum,” he wrote. This solution will make it difficult to transfer profits to tax havens.
The administration of US President Joe Biden has proposed a global tax as a way to avoid taxes by digital companies that have made profits in other countries, and thus pay less or no taxes at all. Initially, a rate of at least 21% was proposed, but over time the bar was reduced to 15%.
Representatives of Facebook, Amazon and Google evaluated the agreement positively, noting that it will help stabilize taxes for global companies. We hope that the discussion will take place in the G20 Forum An Amazon spokesperson said.