The meeting of the finance ministers of the G20 nations that is being held in the Italian city of Venice for focused decision making on an overhaul of the rules for cross-border corporate taxation saw France pushing its counterparts to approve granting themselves the ability of taxing at least a quarter of the profits made by big multinationals irrespective of where the profits are earned by the companies.
At the Venice summit, the finance chiefs of the G20 countries formally endorsed an outline of plans for making new rules and regulations for where multinational should be taxed for their profits as well as setting of a minimum corporate tax rate of 15 per cent globally even though the crucial details of the new rules remain to be finalized by the G20.
Big tech companies are able to book profits in countries with low tax regimens – also known as tax havens, even when they earn the profits in other higher tax regimes because of the emergence of digital commerce that has allowed tech companies to do business all over the world without being registered in all the markets where they operate in a way that makes them liable to be taxed in such markets.
It is expected that the new rules for taxing multinational and for5mal adoption of the minimum global corporate tax will be taken by the F20 countries when they meet at a Rome summit in October this year which is expected to give countries to tax tech companies and multinationals in the markets where they earn the profits and impose taxes of 20-30 per cent of a big multinational's excess profit – which is known as profit in excess of 10 per cent of revenue.
European Union Economics Commissioner Paolo Gentiloni said at the meeting that a higher share was being pushed for by developing countries, such as Brazil.
"I think that the best solution would be a level of allocation of profit of 25% to meet the concerns of some developing countries which are legitimate concerns," French Finance Minister Bruno Le Maire told reporters.
Those multinationals that have a turnover above 20 billion euros ($23.8 billion) would be the companies that come under the scope of the new rules even though the threshold for the revenues could be brought down to 10 billion euros after seven years following a review.
There were demands by some countries to adopt the 10 billion threshold, while there were other countries wanted the new rule to exclude some industrial sectors from the scope of the new rules, in addition to financial services and mining industries which are already exempt, Gentiloni said.
(Source:www.usnews.com)
At the Venice summit, the finance chiefs of the G20 countries formally endorsed an outline of plans for making new rules and regulations for where multinational should be taxed for their profits as well as setting of a minimum corporate tax rate of 15 per cent globally even though the crucial details of the new rules remain to be finalized by the G20.
Big tech companies are able to book profits in countries with low tax regimens – also known as tax havens, even when they earn the profits in other higher tax regimes because of the emergence of digital commerce that has allowed tech companies to do business all over the world without being registered in all the markets where they operate in a way that makes them liable to be taxed in such markets.
It is expected that the new rules for taxing multinational and for5mal adoption of the minimum global corporate tax will be taken by the F20 countries when they meet at a Rome summit in October this year which is expected to give countries to tax tech companies and multinationals in the markets where they earn the profits and impose taxes of 20-30 per cent of a big multinational's excess profit – which is known as profit in excess of 10 per cent of revenue.
European Union Economics Commissioner Paolo Gentiloni said at the meeting that a higher share was being pushed for by developing countries, such as Brazil.
"I think that the best solution would be a level of allocation of profit of 25% to meet the concerns of some developing countries which are legitimate concerns," French Finance Minister Bruno Le Maire told reporters.
Those multinationals that have a turnover above 20 billion euros ($23.8 billion) would be the companies that come under the scope of the new rules even though the threshold for the revenues could be brought down to 10 billion euros after seven years following a review.
There were demands by some countries to adopt the 10 billion threshold, while there were other countries wanted the new rule to exclude some industrial sectors from the scope of the new rules, in addition to financial services and mining industries which are already exempt, Gentiloni said.
(Source:www.usnews.com)
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