At the G7 finance summit, the Chancellor announces a “historic” tax accord.
The Chancellor has lauded a “historic” decision by the G7 countries to agree on a worldwide corporate tax base rate and tax reforms aimed at online business giants.
After two days of meetings in London with G7 finance ministers, including US and German counterparts, Rishi Sunak announced that they had agreed to a company tax rate of “at least 15%.”
Changes will also be made to guarantee that significant firms, particularly those with a big internet presence, pay taxes in the nations where they operate, not just in the countries where their headquarters are located.
The new policy is understood to be directed at companies like Amazon and Microsoft.
“I am thrilled to announce that today, after years of negotiation, G7 finance ministers have struck a historic agreement to change the global tax system,” the Chancellor said after a meeting at Lancaster House.
“To adapt it to the global digital age, but most importantly, to ensure that it is fair, ensuring that the right corporations pay the appropriate tax in the right areas, which is a tremendous reward for British taxpayers.”
Mr Sunak said he was “proud” of his colleagues for working together to establish a pact that “finally takes our global tax system into the twenty-first century,” adding that Japan, Canada, France, and Italy were all part of the group.
“Under pillar one of this historic agreement, the largest and most lucrative multinationals will be forced to pay tax in the countries where they operate – not only where they have their headquarters,” a Treasury spokesman said.
“The rules would apply to worldwide corporations with a profit margin of at least 10%, with 20% of any earnings over 10% being reallocated and then subjected to tax in the countries where they operate.
“A fairer system will allow the UK to collect more tax income from huge international corporations, which will help fund public services in the UK.”
Former UK deputy prime minister Sir Nick Clegg is now the vice president of Facebook. (This is a brief piece.)