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Updated June 6th, 2021 at 05:54 IST

Facebook welcomes G7 plan for 15 per cent minimum corporate tax globally

Facebook on June 5 welcomed the historic G7 pledge to commit to a global minimum corporate tax rate despite the social media giant risking paying more.

Reported by: Bhavya Sukheja
Facebook
IMAGE: AP/TWITTER | Image:self
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Facebook on June 5 welcomed the historic G7 pledge to commit to a global minimum corporate tax rate despite the social media giant risking paying more. The G7 nations and Central Bank Governors Communiqué reached a landmark agreement to seek higher global taxation on multinational businesses including Google, Apple and Amazon. In a massive development that could raise hundreds of billions of dollars for governments to cope up with economic distress caused by COVID-19, G7 nations consisting of Canada, France, Germany, Italy, Japan, the UK and the US, decided to back a minimum global corporate rate of at least 15% and for firms to pay more tax in the markets they choose to sell goods and services in. 

Following the historic agreement, Facebook’s vice president of global affairs, Nick Clegg welcomed the “important progress”. He called the agreement a “significant step”. Clegg added that the social media firm wants it to succeed even though it could mean Facebook has to more tax. 

‘Historic agreement’ 

Meanwhile, G7’s official release stated, “We strongly support the efforts underway through the G20/OECD Inclusive Framework to address the tax challenges arising from globalisation and the digitalisation of the economy and to adopt a global minimum tax. We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises”. 

“We will provide for appropriate coordination between the application of the new international tax rules and the removal of all Digital Services Taxes, and other relevant similar measures, on all companies. We also commit to a global minimum tax of at least 15% on a country by country basis,” it added.

Following the two-day meet, UK Chancellor Rishi Sunak said, “G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age.” Meanwhile, US Treasury Secretary Janet Yellen also said that the “significant, unprecedented commitment" would end what according to her is a race to the bottom on global taxation.

(Image: AP/Twitter)

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Published June 6th, 2021 at 05:54 IST

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