31/05/21

UK: Rishi Sunak calls on Biden to strike deal for global tech tax.

As published on cityam.com, Monday 31 May, 2021

Rishi Sunak has called on Joe Biden to strike a deal on taxing the US’ tech giants as a part of a larger reform on international business taxes.

Sunak is set to hold a G7 meeting of finance ministers later this week in the lead up to the G7 summit in Cornwall next week, which will see Biden make his first European trip since becoming President.

The President has proposed a 15 per cent global minimum on business tax on OECD countries in a bid to stop multinationals from avoiding tax offshore.

Sunak is reportedly not in favour of Biden’s plan as he wants to see more assurances on taxing the globe’s largest tech firms.

Speaking to the Mail on Sunday yesterday, Sunak said: “I want to make sure we get the right deal for British taxpayers, that we level the playing field for British high streets and that’s what I’m doing . . . Large multinational companies, particularly digital companies, are able by the nature of their businesses not to pay the right tax in the right places.

“And that’s not fair and means there isn’t a level playing field with high street businesses. And that’s what I want to fix.”

International agreement is needed on any new comprehensive online tax as the Organisation for Economic Co-operation and Development (OECD) oversees treaties on how profits of multinationals are taxed.

Sunak said in March that he was “very keen to see a resolution” on a global tech tax, with the chancellor making it one of his top three priorities in G7 meetings this year that are hosted by the UK.

Labour has called on Sunak to agree to Biden’s global minimum business tax rate, with shadow Treasury minister James Murray saying Biden’s plan “will bring in billions of pounds in extra tax benefitting Britain, while stopping huge multinationals and online giants from undercutting our businesses”.