Big Tech could actually pay less tax under G7 reforms

Big Tech could pay less corporate tax under the new reforms agreed at the G7 according to think-tank TaxWatch.

TaxWatch believes that Amazon, Ebay, Facebook and Google would pay approximately £232.5 million less tax under G7 plans.

Over the weekend finance ministers from the UK, US and nations within the EU met in Cornwall to discuss new a global tax system which would ensure Big Tech could no longer exploit tax loopholes in the future.

“The historic global tax agreement backed by G7 finance ministers reforms the global tax system to make it fit for the global digital age, achieving a level playing field for all types of companies,” a UK Treasury spokesman told Yahoo Finance.

“The deal makes sure that the system is fair, so that the right companies pay the right tax in the right places.”

READ MORE: Amazon could avoid “historic” G7 tax hikes thanks to glaring loophole

G7 finance ministers agreed a global minimum corporation tax rate of at least 15 per cent at the conference while also agreeing that countries should be able to tax the very largest corporations at 20 per cent of their profits above a 10 per cent margin.

According to the UK Treasury, the new deal would culminate in the largest multinational corporations paying more to the exchequer however this will mainly come from other large international companies instead of Big Tech.

TaxWatch has said that the deal will that the UK will suffer a net loss of tax from Big Tech like Facebook, Amazon, Ebay and Google.

The news comes as the Financial Times reported the UK’s chancellor Rishi Sunak is attempting to find a loophole by which would mean London is excluded in the G7 reforms in order to make the City more attractive for investors post Brexit.

Sunak is reportedly fronting a group of European leaders calling for an exemption for banks.

Banks already face large amount of regulations and are made to properly capitalise on their subsidiaries around the world, this means that banks face large tax burdens in every market they operate in already.

The UK Treasury declined to comment on reports that Sunak was pushing for the financial services loophole.

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