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G20 Countries Wants Giant Tech Companies To Pay Higher Tax

G20 Countries Wants Giant Tech Companies To Pay Higher Tax - Surge Zirc SA
German Finance Minister Olaf Scholz attends a news conference during the G20 Finance Ministers and Central Bank Governors Meeting in Fukuoka, Japan Sunday, June 9, 2019. (Kim Kyung-Hoon/Pool Photo via AP)

Tech giant companies are finding themselves in tight corners for more taxes in parts of Europe. That said, there could be a much more coordinated effort to have them pay up rather than meander their ways out. Reuter reporters says they have obtained a Group of 20 draft communiqué which revealed an agreement to establish “common rules” for closing tax loopholes used by mega tech companies like Amazon, Apple, Facebook and Google.

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Though it’s not yet very clear how that would be achieved, but it is sure to involve a “two-pillar” system which will divide both the rights to tax companies where products are sold and where they have there offices and a minimum tax rate. The leaked report shows that a final report on the plans would be available by 2020.

So far the problem we envisage is how to obtain a consensus from a large group countries like China, India and South Africa plus G8 countries like the US, UK and Russia. So far, US hasn’t supported all British and French’s efforts to increase taxes on tech operators. Trump’s country argued that most of the affected companies are American own companies. While others are not clear on their stand toward the minimum tax rates. A final agreement risks being vague or setting only mild tax requirements.

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A common set of tax operational rules could lead to significantly larger payouts from corporations used to paying relatively little in taxes. They’re likely to object to the measures as they have in the past. But if that happens, they might not earn much sympathy.

Many countries are more concerned that these tech companies are profiting from their residents without contributing to local economic development. So satisfaction would only come when there is a higher tax rate on them.

Source: Engadget

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