Global corporate tax: Is the G7 tax deal adequate?

Global corporate tax: Is the G7 tax deal adequate?

Member States of G7 Welcoming the signing on Saturday Of a “historic” contract London. For good reason, the United Kingdom, France, Italy, Canada, Japan, Germany and the US are determined to establish at least 15% of global corporate tax. It is undoubtedly targeting large technology and digital companies that pay absurd taxes in spite of huge profits, if not zero, by migrating to countries where the corporate tax rate is very low.

This is a clear step towards synchronizing global taxation, which many countries are generally reluctant to deal with. For now, companies are taxed where they make their profits, which is “extremely unequal” depending on the law of each country, Judge Anne-Sophie Alcif, chief economist at the Bureau of Economic Information and Forecasting (BIPE), told L Express.

First reviews

However, the rate set at at least 15% is lower than what the US administration has proposed, which is 21% higher. To raise the reviews, especially as the Attac anti-globalization associations. “This is not a historic forecast,” said O’Reilly, an economist and agricultural engineer and spokesman for Attack France, who underestimated the tax rate. “We can see less of it, yes, but it’s 15% ‘at least’, which should be the basis of the agreement between the members of the G7 and then the OECD and the non-hesitant countries,” said Anne-Sophie Alcif.

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The Aurelie Fund believes that only 20% of the profits of many companies are taxed, and that many uncertainties persist only for those whose margin exceeds 10%. Some companies will allow the line to escape from a condition, especially the Amazon. In fact, Jeff Bezos’ multinational company has mechanisms for tax optimization by declaring its profits in its various subsidiaries, but not in the parent company, explains Anne-Sophie Alcif. This line is aimed precisely kontirukkumpotu digital companies, their profits rose during the health crisis, various countries have imposed controls, triggering a decision of associations purintukollutalait.

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Another question that affects associations is: Who will raise the money, are the countries where the companies have their headquarters or all the countries where they operate? “Because it’s like an agreement between rich countries that benefits rich countries,” Aureli discovered. For example, if Apple is taxed at 15%, “this is good news, but if the money goes to the headquarters country, only the United States will benefit,” explains D-ID.

In addition, countries that now tax more than 15% of companies, as in France now, can link themselves to global taxation and therefore be “downward”. “Corporate tax rates have fallen a lot in recent years, and if countries use this tax to further reduce these rates, it risks fueling rather than resisting tax competition,” warns the Aurelie Foundation.

“Principle of Small Steps”

Many of these questions will be clarified at the G20 summit in Venice in early July. It is with this in mind that the G7 signed the agreement. This is because it is necessary to believe that some proponents of taxation are not very favorable to such synchronization. “The goal is not to force countries, but to create a global trend in the fight against financial deviation, which will prevent countries that refuse to reconsider climate change,” explains Anne-Sophie Alcif.

According to her, this gentle approach partly explains the choices made in the G7 line height and taxable profit margin, which has been criticized by associations. “This is the principle of small steps,” he continues. “The United States understands that the conflict will not work, especially with certain countries, such as China.” This ensures that “criteria must be developed”.

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French Economy Minister Bruno Le Myre announced this Sunday that he expects a “tough fight” to appease “other major powers” like China. But he said “we hope we will win it because the G7 gives precisely this very powerful political impetus”. According to Anne-Sophie Alsif, it is difficult to imagine the moment when these forces will bend. “But when the international trend is in place, there will be pressure like this that if all other states cooperate, it will become more and more difficult to isolate yourself. This is what happened. Eliminate tax havens and banking secrecy.”

“For the medium to long term, it creates tremendous confidence in potential tax breaks.”

Subsequently, the OECD (Organization for Economic Co-operation and Development) will investigate the matter and act sector-wise to avoid inequalities. If this decision is not reversed downwards during the G20, “what will happen”, according to BIPE’s chief economist, “anything can change.” potential tax benefits for a period of countries creates enormous confidence. ”

What is the reaction from the digital giants?

If this line is clearly targeted, Facebook, Apple, Amazon, Google, like digital companies, at least in front, to accept higher taxes and without ambiguity, due to the current environment: -19 kovit governments need to recover from the costs of the health care crisis.

But Anne-Sophie Alcif notes that there will definitely be a “two difference” between the communication and the facts that these companies show. “It would certainly be marketing to say that participation in a global initiative is natural, but once the standards are dictated, there will always be companies finding new ways to improve the taxation of these companies,” he promises.

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Following the announcement of the agreement, the US social networking site Facebook has thus confirmed its desire to “win international tax reform”. The communication campaign began.



France, Paris, January 10, 2020, Portrait of Stephen Barensky.Stephen Barensky

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BIANCHETTI STEFANO / LEEMAGE via AFP and L'EXPRESSWritten by Joel-Alexis Bialkievich

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