Sunak believes US plan on global tax deal could be in the works

par William Schomberg

LONDON (Reuters) – UK Finance Minister Rishi Sunak has said a US proposal to focus on the world’s 100 biggest and most profitable companies under a global tax deal could work, but stressed that big tech Companies will have to pay higher taxes in the countries where they operate.

Rishi Sunak told Reuters that the Group of Seven was “making progress” on reform before the G7 finance ministers flew to London for talks on Friday and Saturday.

This will be their first face-to-face meeting since the outbreak of the coronavirus pandemic. It will also be the first to replace Donald Trump with Joe Biden as President of the United States, raising hopes of greater cooperation between Washington and the rest of the world.

The scheme will simplify the approach of taxing multinational companies. It will focus on the profits of the 100 largest companies that have benefited the most from globalization, the most prominent of which are tech giants, which saw their businesses explode during the pandemic.

Britain and other countries fear the move will not offset the potential impact of a side project to the global minimum corporate tax rate, which could put more money in the US coffers at their expense than they would need to manage their savings. Face the huge cost of coronavirus emergency.

Britain, which is chairing the G7 this year, is particularly concerned about missing out on the opportunity to deal with the way global companies move their profits to less taxing countries.

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But Rishi Sunak, a 41-year-old former Goldman Sachs analyst whose meteoric rise in government made him a likely candidate for prime minister, praised his US counterpart Janet Yellen for “changing the dynamics” and said there was a way forward. is. American offer.

“I can’t go into details, but my general point is that the approach he has established is something we can work with,” Rishi Sunak said in an interview in his office at 11 Downing Street. did.

“A Strong Sign”

In the absence of a global agreement on how tax rights are distributed, the UK and other countries have taxed digital services targeting the revenues of tech companies.

These taxes angered the Trump administration, which began a process that could lead to additional charges.

The Biden administration postponed the process earlier this year. On Wednesday, it announced tariffs of 25% on more than $2 billion in imports from six countries, including Britain, but suspended them for 180 days to focus on international negotiations.

Rishi Sunak, speaking ahead of Washington’s tariff announcement, said Britain plans to raise £500m from its digital services tax this year to “give you an idea of ​​what is fair to result in a global agreement”.

Rishi Sunak said he remained “confident and optimistic” about the prospect of reaching a tax deal in the G7 at the time it is to be presented to G20 finance ministers in July.

Beyond the numbers, the British minister said, reaching an agreement on tax reform – and progress in further aligning the financial system to combat climate change – will show that international cooperation is working again.

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“I think it sends a really strong signal that the big economies, the G7, are able to come together to work on tough problems … and figure out how to solve them,” he said. said. “We haven’t seen it in a long time.”

(French version Camille Raynaud)

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