G7 moves closer on digital tax and warns on new currencies
The Group of Seven (G7) has agreed that large tech companies such as Google, Amazon, Facebook or Apple can be taxed in the countries in which they make money, even without being physically present.
Finance ministers and central bankers from the G7 also said digital currencies such as Facebook's planned Libra raise serious concerns and must be regulated to ensure they do not upset the financial system.
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Finance Minister Bruno Le Maire of France, which holds the rotating presidency of the G7 group of the biggest world economies, told a news conference the group opposed the idea that companies could have the same privilege as nations in creating means of payment - but without the control and obligations that go with it.
G7 members, including the US, agreed there should be a minimum level of tax to discourage countries from competing in a "race to the bottom" to attract business from tech multinationals.
"A minimum level of effective taxation, such as for example the US GILTI regime, would contribute to ensuring that companies pay their fair share," the summary concluded. GILTI aims to subject overseas intangible income to 10.5pc tax to discourage firms from shifting profits abroad to avoid the nominal US corporate tax rate of 21pc. That could help allay possible US fears that the new rules could discriminate against US companies.