Rishi Sunak announces 'historic agreement' by G7 on tax reform

[turbinetree]

This discussion thread was locked as off-topic by JudyM (a host of the Latest Breaking News forum).

Source: The Guardian

Finance ministers agree deal to force multinationals to pay tax in all countries where they operate


The G7 group of wealthy nations have signed a landmark deal to tackle tax abuses by some of the world’s biggest multinationals and establish a minimum global corporation tax for the first time.

Finance ministers from the group agreed the plan on Saturday as part of talks held in London, the chancellor, Rishi Sunak, said.

The principle of the agreement is that multinationals would have to pay a minimum tax rate of at least 15% in each country they operate.

Read more: https://www.theguardian.com/world/2021/jun/05/rishi-sunak-announces-historic-agreement-by-g7-on-tax-reform

[DFW]

1. If done wisely, this could be a step forward. If the EU is involved, I doubt it.

A small firm I know back home in Texas wanted to take over a similar, though much smaller firm in the EU. The EU firm had a turnover of about 2.5% (i.e. one fortieth) the size of the Texas firm. The EU said come on in, welcome, and we will tax you on all of your U.S. income, too. The deal finally went through, but not for 18 months spent making the EU firm a completely independent entity.

Knowing the EU, they will gladly work in language forcing a multinational to pay 15% in taxes on its worldwide income to each country in which it operates, which would make it liable for 105% of its income if it operates in 7 countries. Faced with that, the obvious thing to expect is for the multinationals to bribe enough officials to enact loopholes permitting them to pay even less than they pay now.

If done intelligently and fairly, the biggies probably won‘t bother to spend the money to fight it. If done stupidly, the only ones to get rich will be the lawyers and a few corrupt politicians.

[JudyM]

2. Locking

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