Home > Business > Global Tax Deal Reached Among G7 Nations

Global Tax Deal Reached Among G7 Nations


Bruno Le Maire, France’s finance minister, applauded the agreement as ambitious and said that his country would continue to push for a higher tax rate.

“This agreement will make it possible to tax the digital giants, and for the first time to implement a minimum corporate tax rate to crack down on tax dumping,” Mr. Le Maire said on Saturday. “As talks continue, France will aim for the highest possible minimum tax rate to put an end to the race to the bottom in certain countries.”

Huge sums of money are at stake. A report this month from the EU Tax Observatory estimated that a 15 percent minimum tax would yield an additional 48 billion euros, or $58 billion, a year. The Biden administration projected in its budget last month that the new global minimum tax system could help bring in $500 billion in tax revenue over a decade to the United States.

The agreement signaled a return to comity among the club of wealthy countries, which was fractured in recent years as the Trump administration imposed tariffs on American allies, but has regained its footing since Mr. Biden took office. Last year, the Treasury secretary at the time, Steven Mnuchin, abandoned the talks after negotiations over the digital taxes stalled and President Donald J. Trump prepared retaliatory tariffs against countries that planned to tax American technology companies.

The negotiations regained momentum this year after Ms. Yellen offered new proposals that succeeded in breaking the gridlock. She suggested a global minimum tax rate of at least 15 percent and proposed replacing European digital services taxes with a new levy on the world’s largest 100 companies that would be based on where a company sells its goods or services, regardless of whether it also has a physical presence in those countries.

Mr. Le Maire said that Ms. Yellen’s involvement was pivotal.

“Let’s be clear, we have someone with whom it’s easy to discuss, easy to build compromises and easy to bridge some gaps between the different nations,” he said.

Despite the breakthrough, completing such a sweeping agreement will not be easy and the threat of a trade war remains if countries keep their digital services taxes in place. The Biden administration said this month that it was prepared to move forward with tariffs on about $2.1 billion worth of goods from Austria, Britain, India, Italy, Spain and Turkey in retaliation for their digital taxes. However, it is keeping them on hold while the tax negotiations unfold.

Source link

Hi guys, this is Kimmy, I started LicensetoBlog to help you with the latest updated news about the world with daily updates from all leading news sources. Beside, I love to write about several niches like health, business, finance, travel, automation, parenting and about other useful topics to keep you find the the original information on any particular topic. Hope you will find LicensetoBlog helpful in various ways. Keep blogging and help us grow as a community for internet lovers.