Amazon, Facebook to endure higher levy of taxes following G7 consensus
Category: # |   By Hrishikesh Kadam |   Date: 2021-06-07  | 
  • Share
  • Twitter
  • Facebook
  • LinkedIn

Amazon, Facebook to endure higher levy of taxes following G7 consensus

The Group of Seven (G7), consisting of the world’s seven largest economies, has reportedly reached a momentous agreement to levy a global minimum corporate tax rate of 15% to prevent internet giants like Amazon and Facebook from avoiding taxes.

The UK's Chancellor of the Exchequer, Rishi Sunak, was quoted saying that the new tax system has been finalized after long-winded deliberations, to make it suitable for the global digital age, and to ensure that the right companies pay the right tax in the right places.

The tax deal agreed on by the G7 countries will ensure that multinational corporations pay higher taxes in their operational regions. This is will prevent companies from setting up local branches in nations having low corporate tax rates and then declaring profits there, according to sources.

If reports are to be believed, the agreement consists of two parts, with the first part being applicable for global companies with at least a 10% profit margin.

The adjustment will most prominently affect internet giants, Facebook, Amazon, and Google, as any profits over the 10% margin will be reallocated and taxed at 20% in the countries where they make sales.

The second part of the agreement reportedly entails a commitment to introducing a minimum global corporate tax rate of 15%. This will discourage corporate giants from declaring profits in tax havens, while also stopping countries from trying to undercut each other by levying lower rates of tax.

Market experts revealed that the latter part of the agreement will be a big win for the U.S., as President Joe Biden's infrastructure plans involve a hike in the country's corporate tax rate. Moreover, uniform tax rates across the world will act as an incentive for multinational companies to remain in the U.S. even with higher taxes.

Companies like Microsoft, Netflix, Amazon, Alphabet Inc., Facebook, and Apple have long been accused of avoiding paying taxes over the past decade. The global minimum tax rate will end the race-to-the-bottom in corporate taxation while leveling the playing field for other players.

Source link –

https://www.businessinsider.in/international/news/g7-leaders-reach-historic-agreement-to-crackdown-on-tech-giants-by-forcing-amazon-facebook-and-others-to-pay-more-tax/articleshow/83263000.cms

 

  • share
  • Twitter
  • Facebook
  • LinkedIn


About Author

Hrishikesh Kadam    

Hrishikesh Kadam

A graduate in electronics and telecommunication engineering, Hrishikesh Kadam has always found writing fascinating. Driven by a never-ending passion for content creation combined with a bit of experience in writing personal blogs, Hrishikesh blends his technical knowl...

Read More

More News By Hrishikesh Kadam

Volkswagen in advanced discussions to buy Europcar for USD 3 billion
Volkswagen in advanced discussions to buy Europcar for USD 3 billion
By Hrishikesh Kadam

German auto manufacturer, Volkswagen Group is reportedly in talks to purchase France-based car rental company, Europcar Mobility Group, in a deal that values the company at USD 3 billion. Europcar has been considering a potential offer at USD 0.59 p...

Bamboo Works declares itself as a premium business content provider
Bamboo Works declares itself as a premium business content provider
By Hrishikesh Kadam

Content-centric platform Bamboo Works has officially established itself as a premium business news provider by launching thebambooworks.com. The new platform will primarily be focusing on Chinese firms listed overseas, further bridging the gap with t...

Magic plugs in new investment; raises $27million in Series A tranche
Magic plugs in new investment; raises $27million in Series A tranche
By Hrishikesh Kadam

San Francisco-based passwordless authentication technology firm, Magic, has reportedly announced securing USD 27 million in Series A funding round led by Northzone. It has been reported that the first tranche was further headed by the participation f...