Daily Management Review

G20 Should Make Taxing Giant Digital Firms This Year’s Top Priority, Demands The EU


02/14/2020




G20 Should Make Taxing Giant Digital Firms This Year’s Top Priority, Demands The EU
The financial leaders of the G20 countries should strive to reach an agreement by this year globally on the method of taxing the giant digital companies such as Google, Amazon and Facebook, Europe has demanded, claimed reports quoting information derived from a document.
 
The current developments made by the Organisation for Economic Cooperation and Development (OECD) on a globally acceptable and applicable tax rule for digital companies will be one of the major issues of discussion among the finance ministers and central bank governors of the top 20 largest economies (G20) of the world when they meet on February 22-23 in Riyadh.
 
“We need to give the highest priority to finding global solutions to address the taxation of the digital economy and the remaining Base Erosion and Profit Shifting issues,” reported Reuters citing information from a document that outlines the position of the member states of the European Union who are also members of the G20. The list of countries also includes the United Kingdom which eventually exited the EU last month.   
 
“We look forward to ambitious, fair, effective, non-discriminatory and workable global solutions and will redouble our efforts towards a consensus-based solution to deliver this global goal in 2020,” the document said, claimed the Reuters report.
 
It has been a long standing stance of the European Union that the large digital companies that make very large amounts of profits should be made to pay taxes form where they sell their services and generate revenues instead of paying taxes in the so called tax haven where most of such large digital companies have their European headquarters. This strategy of intentional choosing of a tax haven is referred to as “aggressive tax optimization”.
 
For example, the United States based search engine giant Google which has an average annual profit of more than $160 billion, has been paying taxes in Europe at single digit rates for the profits it makes form its European business by the virtue of being headquartered in low tax countries. The effective tax rate for Google has been about a quarter of the average tax rate in its overseas markets and this has for long made EU politicians angry because the bloc is seeking more money to fight climate change and reduce wealth differences across the 27-nation bloc.
 
Despite the best efforts of the EU to develop a globally acceptable and agreeable tax regime for these huge digital companies making billions of dollars in profits, nothing has emerged as yet which has prompted some European countries such as France to announce and implement new taxes for such companies last year. However the US has threatened to impose retaliatory tariffs.
 
Other countries that have already introduced their own digital taxes or plan to do so include Italy, Britain and Spain.
 
Reports said that the Facebook CEO Mark Zuckerberg cionce3de that any global tax reforms would mean that the company would have to pay higher taxes in different countries.
 
The current issue that the OECD is tackling right now is the technicalities about the amount of tax rates for the digital companies and where to tax the companies The organization wants to arrive at an agreement with all players by June this year while reaching a deal on a full array of taxation polices for the companies by the end of the current year.
 
(Source:www.reuters.com)






Science & Technology

SpaceX Receives Approval To Create Research & Manufacturing Facility In Los Angeles

JPMorgan: Transition to e-money will be based on blockchain

Tesla In Advance Talks With CATL For Using Lithium Batteries

Financial giants and US government turn to quantum computers

Long Way To Go For Coronavirus Vaccine, Say Drgumakers

Google's subsidiary launches recognition service for photoshopped images

Unapproved Drug For Coronavirus Treatment And Testing Given By Gilead Sciences

Live Facial Recognition Cameras Will Be Used By London Police

Driverless Vehicle For Its Ride-Sharing Service Unveiled By GM’s Cruise

Amazon will allow customers to pay with palms instead of cards

World Politics

World & Politics

Japan’s vice minister will fly to Lebanon to make case for Carlos Ghosn’s return

Compared To China, More New Coronavirus Cases Being Reported From Outside It

EU Informs Britain That It Can’t Slacken EU Climate Goals & Carbon Pricing

France shuts down first reactor of the country's oldest NPP

Coronavirus Outbreak Delays Several Conference And Trade Deals Across The Globe

Germany pledges to fight right-wing extremism after Hanau shooting

Ex-head of Mexican Pemex will be transferred to Madrid prison

China Releases First Detailed Study Of Coronaviurs Attack, Finds Elderly At Most Risk