October 26, 2021

The Queens County Citizen

Complete Canadian News World

Global minimum tax: Washington says Amazon and Facebook will not escape it

Global minimum tax: Washington says Amazon and Facebook will not escape it

Amazon and Facebook, like other digital giants, are subject to the Group of Seven Global Minimum Corporate TaxesU.S. Treasury Secretary Janet Yellen said Saturday. When asked if the two companies fall within the scope of the proposal, Ms Yellen confirmed that the G7 agreement applies. Big profitable companies and I believe these companies deserve almost any definition.

In fact, Europeans feared that companies like e-commerce giant Amazon would crack down because its margins were small compared to other big names in digital giants.

The G7 finance ministers, who met in London on Saturday, agreed to support it Worldwide at least 15% corporate tax To prevent multinational corporations from evading taxes by hiding their profits in countries with lower tax rates. They approved proposals to force, including the world’s largest companies American tech giants, Paying taxes in countries that have achieved significant turnover without a physical headquarters.

The meeting was attended by UK Finance Minister Rishi Sunak among other things Reform the global tax system to keep pace with the global digital age And, most importantly, to ensure that it is fair The right companies pay the right taxes in the right places.

Part of this agreement, among other things, is that countries like France, which imposes taxes on digital services, will remove them in favor of the global agreement. The United States considers these arbitrary digital taxes to be unjust trade measures that penalize large American technology companies such as Google, Amazon and Facebook.

Reactions from web giants

Facebook is eager to welcome the reform project on Saturday, agreeing that it could also understand the need for a social network Pay higher taxes in different places. The American giant also promised that this international tax reform would be a success.

READ  Novavax receives $1.6B vaccine raise as Brazil's Bolsonaro assessments optimistic

Google said on Saturday it strongly supports efforts to update international tax rules.

We hope that the countries will work towards concluding a balanced and permanent agreement soon., A spokesman for the American Internet giant Jose Costasada said in a statement sent via email.

Amazon promoted the launch processOECD To create A multilateral solution that helps stabilize international taxation. We hope that the negotiations with the G20 will continueHowever, a spokesman for the group said.

With this agreement, the G7 countries want to end tax competition, which has led to a sharp decline in tax revenue from companies since the mid-1980s. Digital giants filled their pockets with a politically unacceptable situation when state boxes were emptied by the pandemic.

Controversial rate

If the version is unanimously welcomed, the proposed rate will be discussed. For Oxfam, a non-governmental organization, the time has come for the world’s most powerful economies to force multinational corporations, including tech and pharmaceutical giants, to pay a fair share of their taxes, despite a lower tax rate. More than 15% is not enough.

The global minimum corporate tax rate is just $ 15 % Path too short. It does very little to end the dangerous race on corporate taxes and the widespread use of tax havens.

A quote from:Gabriela Butcher, Oxfam spokeswoman

According to the company, the G7 is too absurd to mention it Modified the failed global tax system By establishing a global minimum corporate tax Similar to the reduced rates charged by tax havens such as Ireland, Switzerland and Singapore. We are setting the bar too low so that businesses can break it down, The company wrote in a press release.

READ  Greece relocates group of younger refugees to Portugal By Reuters

The Association for the Taxation of Financial Transactions and Citizen Action (ATTAC) speaks of some part of a missed opportunity, assuming that the 15% rate is too low and that the calculation base is too vague.

True, most G7 actors know that they still have to rally the G20, and then almost 140 countries are working on a tax reform project.OECD.

This journey must have taken many years. Convincing countries that have built their economies on low corporate tax rates, such as Ireland (12.5%), will be a challenge that has attracted many multinational corporations to European headquarters, often American, especially in the fields of technology and pharmacy.

The activity of these companies is very heavy on Irish GDP: for these companies it increased by 7.8% in the first quarter, but without them it would have decreased by 1% due to health constraints.

Irish Finance Minister Pascal Donohue said he was there on Saturday It is in everyone’s interest to reach a permanent, ambitious and fair agreement on the international tax structure.

Countries like the European Union Ireland need to find a way to follow the new economic model.