Amazon and Facebook to fall under new G7 tax rules

Both Amazon and Facebook will fall under new proposals for a global minimum corporation tax agreed by the Group of Seven (G7) nations on Saturday, US Treasury secretary Janet Yellen said.

A joint statement by G7 finance ministers on Saturday said it would tackle tax avoidance by “the largest and most profitable multinational enterprises”.

G7 finance ministers agreed to pursue a global minimum corporate tax of at least 15 percent and to reallocate taxing rights for large, profitable multinational companies.

Amazon has lower profit margins than most other tech companies, and European countries had been concerned it would escape extra taxation under initial US proposals to the G7.

Asked whether the two companies would be covered by the proposal, Yellen said: “It will include large profitable firms and those firms, I believe, will qualify by almost any definition.”

G7 nations are Canada, France, Germany, Italy, Japan, the UK and the US.

Facebook welcomed the progress made by the Group of Seven on a minimum tax rate and accepted that this could mean the social network pays more tax, and in different places, its head of global affairs Nick Clegg said.

Facebook has long called for reform of the global tax rules and we welcome the important progress made at the G7,” Clegg said on Twitter.

“Today’s agreement is a significant first step towards certainty for businesses and strengthening public confidence in the global tax system.

“We want the international tax reform process to succeed and recognize this could mean Facebook paying more tax, and in different places.”

Google said it supports the work being done to update international tax rules.

“We strongly support the work being done to update international tax rules,” Google spokesman José Castañeda said in an emailed statement.

“We hope countries continue to work together to ensure a balanced and durable agreement will be finalised soon.”

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Lisa is avid technical blogger. Along with writing a good articles, She has close interests in gadgets, mobile and follows them passionately.

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