UK Investment Guides Loader

Global tax agreement must include tech firms, says source

written by Bella Palmer
global-tax

Last year, it was revealed that Facebook, Google, and Microsoft could be avoiding £2.1 billion in tax by exploiting loopholes in developing countries

The UK's Treasury department has stated that any global agreement on the minimum tax rate paid by corporations must include tech companies.

An anonymous government source made the comments to Reuters ahead of the UK-hosted G7 Trade Ministerial meeting this week, and is to include the trade ministers of Canada, France, Germany, Italy, Japan, US, and the EU.

The HM Treasury source told the publication that the UK's consistent position has been that it matters where tax is paid.

Any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities, they said, adding that they welcome the US's renewed commitment to tackling the issue and agree that minimum taxes might help to ensure businesses pay tax – as long as they are part of that package approach.

Last year, it was revealed that three US companies – Facebook, Google, and Microsoft – could be avoiding £2.1 billion in tax by exploiting loopholes in developing countries.

Taxing tech giants has been a contentious issue between the UK and the US, with the latter recently considering implementing a 25% tariff on a selection of British goods that enter the country in retaliation to the former's digital services tax (DST).

Although the source of the statement hasn't been named, the government said on Thursday that International Trade secretary Liz Truss would push for collective G7 support for the creation of rules governing digital and data trade.

At today's G7 Trade Ministerial meeting, Truss is expected to mention that the UK wants to use its G7 Presidency to address the fundamental issues facing global trade.

Like-minded democracies need to lead the charge on trade reform, because if we don't then there is a very real danger that global trade fragments and that fewer countries end up playing by the rules, she is expected to say.

Truss is also expected to tell attendees of the meeting that international trade only works when it is fair and when countries submit themselves to a common set of rules  and that as a result, the world needs a more modern and dynamic WTO.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

You can tell friends this post!