Taxing Dispute Resolved Among G7 Ministers
The question of taxing large companies has caused tension between the US and its allies, particularly France and the UK. However, all seven countries have now found common ground on the issue.
The French Finance Minister Bruno Le Maire has been a prominent advocate for imposing taxes on tech giants like Amazon. Le Maire spearheaded a two-day meeting in Chantilly, near Paris, where G7 ministers reached an agreement that he described as “unprecedented.” In July, the French parliament passed a law to tax large corporations based on the income they generate within France, regardless of where their headquarters are located. Le Maire stated that France would be open to revoking the law if an international consensus on a specific form of taxation for these companies could be reached. This move led to tension with the US, as American officials raised concerns about the perceived targeting of tech giants such as Facebook, Google, Amazon, and Apple.
Following France’s lead, the UK had been considering its own tax initiatives. Subsequently, G7 finance ministers and central banks have now agreed to tax activities that occur without a physical presence, especially digital operations, as confirmed by Le Maire. He noted that this marks the first instance of G7 members reaching a preliminary agreement on this matter.
France has announced that G7 representatives have endorsed a “two-pillar solution to be implemented by 2020.” The plan entails the international community establishing a minimum tax rate for global digital companies.
