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> International Taxation, Agreement reached.
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Envoirment
post Jun 4 2021, 07:56 PM
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Perhaps some good news.

A global agreement to end the "race to the bottom" on corporate taxation is within sight, according to the French and German finance ministers.

France's Bruno le Maire told the BBC the G7 club of rich nations were "just one millimetre away from a historic agreement" on a global minimum rate.

He urged low tax states like Ireland to back a deal which would target tech giants such as Amazon and Microsoft.

The German finance minister said a 15% rate would help pay back Covid debt

Tax on big tech and multi-nationals has been a source of friction between the US and fellow G7 countries such as the UK.

German finance minister Olaf Scholz said it was important to stop the world's biggest companies from dodging tax.

He said it was "absolutely necessary" to reach a deal in order to "get out of this race to the bottom we see with taxes today…especially after the Covid crisis and all the money we spent to defend the health of the people, and to defend the economy."


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It's been a long time coming. Hopefully there will also be an agreement regarding digital taxation this year too. We may see a much fairer taxation system internationally due to the pandemic, which would be very welcome.


This post has been edited by Envoirment: Jun 5 2021, 12:41 PM
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Brett-Butler
post Jun 4 2021, 08:20 PM
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As someone who strenuously dislikes the fact that Ireland has been reduced to a tax haven with a country attached, I would welcome a higher tax rate here, although doing so on an international basis could only work if all countries agreed to it, otherwise you'd still have the usual race to the bottom. Interesting to note that if it is 15% that's the basement figure, there aren't as many countries in Europe that would have to raise their corporation tax rate to make it to that level.
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Envoirment
post Jun 5 2021, 12:40 PM
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An agreement has been reached!

The rules on making multinationals pay taxes where they operate - known as "pillar one" of the agreement - would apply to global companies with at least a 10% profit margin.

Twenty percent of any profit above that would be reallocated and taxed in the countries where they operate, according to the G7 communiqué.

The second "pillar" of the agreement commits states to a global minimum corporate tax rate of 15% to avoid countries undercutting each other.


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This could help generate billions of tax revenue across the globe annually.
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steve201
post Jun 5 2021, 06:07 PM
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Great to see, i will believe it when I see it played out though. Might be bad for ireland though as it’s basically a tax haven. But it’s a bad thing that Ireland thinks it can do this so big companies come just to use the country. Plus a lot of those who work for the companies aren’t even from Ireland originally there come to work there from other countries.
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