Business News

The G7 tax alliance is a ‘starting point’ for global change

The world’s leading tax alliance this weekend is the first evidence of international co-operation since President Joe Biden restored the United States to the negotiating table. However, there is still a long way to go.

“This is the beginning,” said French finance minister Bruno Le Maire, promising that “in the coming months we will fight to ensure that lower corporate taxes are higher.”

The agreement seeks to ban foreign businesses that have resorted to tax evasion measures, to ensure that they pay more for the countries in which they operate.

G7 officials supported the world at least 15%, and agreed that countries should have the right to impose the largest, most beneficial taxes on the countries where they are located.

However, he left much to be desired in the international negotiations, which are taking place in 139 countries at the OECD in Paris. The first challenge of the G7 summit is the support of the G20 summit, which will meet in Venice next month.

When OECD to compare These targets can also generate $ 50bn- $ 80bn per year in taxes, and the revenue they earn varies depending on the capabilities of the international agreement.

Two things will affect you in particular: the amount of the minimum and whether the countries that follow the minimum will be able to pay the fees charged in countries that do not. The magnitude of the impact is also strongly influenced by the latter principle, called “legal integration” or “state and national authorities”.

NGOs criticized the lowest 15% as too low; The UK’s think tank IPPR said it would “not be enough to finish the race to the ground”.

But Gabriel Zucman, an economist at the University of California, Berkeley, well-known for his tax-deductible work, wrote that the work was “historic, inadequate and promising” – because while 15% was very low, there was no obstacle at the highest level.

The lower price “reduces costs for multinational companies in order to make a profit in taxation”, he said, but added that at a lower rate, “it is important for it to be national and international”, as companies can use tariffs that have risen more than 15% elsewhere.

Officials and officials at the G7 talks were under pressure to ensure that the treaty did not imply that the country agreed to a global tax reform, nor did the plan succeed. Instead, it was used as a precautionary measure to promote international dialogue.

This was approved by other countries. Irish Finance Minister Paschal Donohoe joined the G7 ministers in London, although he defended the country by 12.5%.

After the announcement he wrote: “I look forward now to negotiating with them at [the] OECD. . . Each alliance must meet the needs of small and large countries, both developed and developing. ”

A top $ bn annual chart shows that global taxes could raise billions in governments, according to the OECD

Global dialogue must reconcile what the world is looking forward to in terms of two issues, the so-called “pillars”.

The first, a major one in the UK, France and Italy, seeks to ensure that the world’s largest companies – especially US digital giants Facebook, Google and Apple – pay higher taxes in their countries even if they do not exist.

Rishi Sunak, the UK’s chancellor, said the G7 agreement ensured that “the right companies pay the right taxes in the right places”, meaning one pillar.

In contrast, US Secretary of State Janet Yellen did not mention this in her preliminary statement, looking at the second pillar: the lowest price in the world “at least 15%”. This could bring a lot of money to the Washington government.

The first requires international co-operation with U.S. legislation to be passed through Congress, while the second – which the OECD estimates will raise additional funding – could be held unanimously, but could work better if more countries came.

Another pillar has been heavily criticized in Washington. France, Italy and the UK are refusing to end their digital taxes until the US enacts appropriate legislation. Canadian finance minister Chrystia Freeland said the G7 agreement had been announced as his country wanted to continue with a digital tariff.

Apart from this, there are many unanswered questions that can make a big difference in a partnership agreement – including companies that can reach its limits, and how they can define taxes.

“While headlines are important, competition must continue through taxes. This can be confusing, “said Rita de la Feria, a professor of tax law at the University of Leeds.

Asked how she would sell the agreement to US lawmakers, Yellen said it would “give assurance to companies in the US and around the world of the environment they will use and the environment has become unstable”.

And he he thanked “International revival”.

In particular, some ministers said the haste to accede to the G7 and to show that rich countries are still needed, in order to show the world that the 21st century is not governed by Chinese laws.

Western powers are seeking to resume international operations by implementing agreements in conflict zones after four years of Trump’s administration where this is not possible, ministers said in public and in private.

“What I have seen in my time on this G7 [meeting] is a partnership and a desire to help connect and address a wide range of global issues, ”said Yellen.

Source link

Related Articles

Leave a Reply

Back to top button