The tax on profits of technology companies tops the “Big Seven” meeting

During the G7 finance ministers meeting in London.

AFP

The finance ministers of the Group of Seven major industrialized countries began a meeting in the British capital, London, yesterday. The project of the global minimum tax on corporate profits, which the administration of US President Joe Biden re-introduced, tops its agenda.

At the start of the meeting, British Finance Minister Rishi Sunak said: "Expectations are high that we can agree on corporate tax reform."

He added, "In a well-known, digital, and complex economy, we cannot continue to rely on a tax system that was designed in large part in the 1920s."

At the forefront of the research is the issue of imposing a global minimum tax that falls within the framework of a broader tax reform proposed by the Organization for Economic Cooperation and Development, with a second prong that provides for the imposition of a tax on the profits of large multinational companies, especially those operating in the digital sector in the countries where the profits are achieved. And not in the countries in which it is registered.

And an opinion article published in the British newspaper "The Guardian" stated that the finance ministers of Germany, France and Italy, as well as Spain, a non-member of the Group of Seven, will defend a common position on this issue.

The Guardian cited the example of the Irish subsidiary of the US Microsoft Group, which did not pay any corporate tax last year because it was registered in Bermuda, despite profits of $315 billion.

The Frenchman, Bruno Le Maire, the German Olaf Schultz, the Italian Daniele Franco and the Spanish Nadia Calino pledged to “take a common position on the global tax starting from the meeting of the G7 finance ministers in London,” considering the opportunity to reach an agreement within reach, during the meeting of finance ministers in London. "Group of 20" next July.

"We have an opportunity to make multinational companies pay a fair share," the ministers added.

A source familiar with the negotiations said that the G7 considers this issue a response to the “tax avoidance strategies” adopted by some companies, noting that member states “have never been so close to agreement on this issue.”

This project, which Paris has been pushing for several years, is taking advantage of new impetus after Democrat Joe Biden came to power in the United States, and is more inclined to support multilateral negotiations than his Republican predecessor, Donald Trump.

The Biden administration first introduced a minimum corporate tax of 21% before lowering it to 15% in an attempt to gain greater support.

The draft joint final statement, a copy of which was obtained by AFP, said the G7 finance ministers would initially express strong support for an ambitious minimum corporate tax and a "fair distribution" of rights to tax the profits of multinational companies, especially those prominent in the digital sector.

A formal agreement may not be announced except during the next meeting of the finance ministers of the Group of 20, which will be held next July in Venice, before it is ratified by the 38 countries of the Organization for Economic Cooperation and Development.

• The Biden administration introduced a minimum tax of 21% before reducing it to 15%.

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