The G7 countries have decided to introduce a single income tax for large corporations. It will be at least 15% and may be increased in the future. The initiative will force companies to donate more money to state coffers, but despite this, Facebook has already expressed its agreement with it. Russia is not included in the G7 – it will say its word on this issue at the meeting of the G20 economy ministers in July 2021.
Single global tax
The Group of Seven (G7) countries have approved a minimum income tax for large corporations. According to Reuters, this directly applies to technology giants – Google, Apple, Facebook, Amazon, etc.
In the words of Finance Minister of the United Kingdom Rishi Sunako (Rishi Sunak), G7 countries have reached agreement on the size of the minimum tax on the profit for the meeting in London (UK). According to the generally accepted decision, now the minimum income tax for large corporations should be 15%.
The G7 is an informal international association that does not include Russia. The G7 currently consists of the United Kingdom, Germany, Italy, Canada, the United States, France and Japan.
Rishi Sunak called the decision “historic”.
“Today in London, my financial colleagues and I reached a historic agreement on global tax reform, requiring the largest multinational tech giants to pay their fair share of taxes in the UK,” Sunak tweeted.
Who will pay the new tax
According to Reuters, many countries have been unable to implement a single income tax for large corporations for many years. This was hampered by the fact that corporations are regularly registered in jurisdictions that have implemented a preferential tax regime.
The innovation will force these companies to pay more money to the treasury. Rishi Sunak clarified which corporations are subject to these changes. “In accordance with the principles of epoch-making reforms, the largest world firms with a profitability of at least 10% will be covered. At the same time, 20% of any profits in excess of 10% will be redistributed and then taxed in the countries where they sell, ”he wrote on Twitter.
Representatives of Italy at the G7 clarified that the innovation will affect not only American corporations. The initiative will be global in nature.
French Finance Minister Bruno Le Maire (Bruno Le Maire) said that he would insist on raising the minimum tax. He called 15% a “starting point.” German Finance Minister Olaf Scholz (Olaf Scholz) called the deal “a bad news for the” tax havens “around the world”.
The G7 decision received a lot of positive reviews. According to Reuters, on positively responded about it, for example, the chief economist of the International Monetary Fund (IMF) Gita Gopinat (Gita Gopinath). According to her, the current differences in national corporate tax rates are leading to a reduction in the tax base on which governments could collect revenues to finance necessary economic and social expenditures.