G7 leaders strike deal to tax Google, Amazon and other tech giants
The United States, Britain and other large, rich nations reached a landmark deal on Saturday to squeeze more money out of multinational companies such as Amazon and Google and reduce their incentive to shift profits to low-tax offshore havens.
Hundreds of billions of dollars could flow into the coffers of governments left cash-strapped by the coronavirus disease (Covid-19) pandemic after the G7 advanced economies agreed to back a minimum global corporate tax rate of at least 15%.
The decision was taken at the meeting of G7 finance ministers in London.
British Treasury chief Rishi Sunak posted a Twitter thread where he explained what the deal means. "Under the principles of the landmark reforms, the largest global firms with profit margins of at least 10% will be in scope – with 20% of any profit above the 10% margin reallocated and then subjected to tax in the countries where they make sales," he said in one of the tweets.
He also said that the move will create a more level-playing field for UK firms and cracking down on tax avoidance.
US Treasury Secretary Janet Yellen said the agreement “provides tremendous momentum” for 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 G7 leaders scheduled for June 11-13 in Cornwall, England.
"Signaling that there is consensus around some of the key features of what’s being discussed globally was really, really important so they have the momentum to go to the next phase of this with the G-20," said Manal Corwin, a tax principal at professional services firm KPMG and a former Treasury Department official.
Part of the agreement Saturday is that other countries would repeal their unilateral digital taxes in favour of a global agreement.
The Group of 7 is an informal forum among Canada, France, Germany, Italy, Japan, the UK and the United States. European Union representatives also attend. Its decisions are not legally binding, but leaders can use the forum to exert political influence.
British Prime Minister Boris Johnson finally succumbed to political reality Thursday and resigned after the latest ethics scandal around his leadership led some 50 senior lawmakers to quit the government. He said he will continue in office until a new Conservative leader is in place.
Boris Johnson's expected departure Thursday -- after a tidal wave of resignations from his top team -- comes just three years after he took over from Theresa May in an internal Conservative leadership contest. Johnson's former Daily Telegraph colleague, Sonia Purnell, suggested that Rishi Sunak and Sajid Javid may have realised what she and others have before them. His privileged cohort in the backstabbing den of student politics provided many leading Brexiteers.
Boris Johnson will announce his resignation as British Prime Minister on Thursday, a government source said, after he was abandoned by ministers and his Conservative Party's lawmakers who said he was no longer fit to govern. In February, Johnson appointed Pincher deputy chief whip, giving him responsibility for the wellbeing of other Conservative lawmakers. Johnson's office initially said the prime minister had been unaware of specific past allegations against Pincher.
As Boris Johnson is expected to resign on Thursday, after over 50 ministers resigned from the UK government, the Kremlin said the British prime minister didn't like Russia and that Moscow didn't like him either. Speaking during a call with reporters, Kremlin spokesman Dmitry Peskov said: “He (Johnson) doesn't like us, we don't like him either.” Peskov said reports that Johnson would shortly resign as prime minister were of little concern for the Kremlin.
With Boris Johnson's premiership in its definitive final stretch – the British media has reported that the embattled PM of the United Kingdom will step down today – all eyes will be on his successor, whose name is likely to be announced in a day or two. The London-based publication, citing data from Oddschecker, reported that Penny Mordaunt and Rishi Sunak, at 22% each, are bookies' favourites to be the 78th premier of the UK.