During the recent meeting in London, countries with leading economies agreed on the new tax rules. Now, the international corporations should pay taxes in the countries where they earn, not in the countries they are registered.
The essence of the agreement
The G7 ministers also agreed that the minimum corporate tax will constitute 15% so that individual countries do not try to gain an advantage by cutting the tax rate.
This agreement will create equal conditions for doing businesses in different countries. At the same time, it will leave no opportunity for international corporations to evade taxes.
The main reason
If successfully implemented, these new rules will allow the participants of the agreement to add billions of dollars to their budgets and cover the gaps created by the Covid-19 pandemic.
The first reaction
Such giants as Amazon and Google are among the corporations falling under the new rules. Seemingly, they do not mind changes and even support them. However, we have no idea what is happening behind the scenes.
An Amazon spokesman said the decision to unify tax schemes would bring additional stability.
Google has officially stated that the company fully approves the work done to update global tax rules.
The next step will be to discuss the new tax order at a meeting of Finance Ministers and Central Bank Governors of the G20 countries, which will be held in Venice in July.
You can check the latest global tax news here.