Facebook Amazon Google publicly praise historic G7 agreement on the minimum type of Companies that will force them to pay more taxes.

The finance ministers of the G7 have agreed this Saturday to promote a minimum rate of 15% on corporate tax, and the main technology companies have shown their agreement in this regard.

The agreement reached by Germany, Canada, the United States, France, Italy, Japan and the United Kingdom will ensure that multinationals pay more taxes where they operate, according to the Financial Times. It is about preventing companies from setting up local branches in countries with low tax rates for companies and declaring their profits there, summarizes the BBC.

Facebook Amazon Google publicly praise historic G7 agreement

The" first pillar " of the deal would apply to global companies with a profit margin of at least 10 percent, according to the BBC. A 20 percent tax on any profits above that margin would be redistributed and taxed in countries where they make sales, British Finance Minister Rishi Sunak explained on Twitter.

The" second pillar " is the commitment to introduce a global minimum corporate tax rate of 15%. This will discourage large companies from declaring their profits in tax havens, according to the Financial Times. It will also prevent countries from trying to take advantage of each other's situation.

The latter is considered a major victory for the Biden Administration. The infrastructure plans that the US president plans to implement contain an increase in the tax rate of companies in the country. If rates are more uniform around the world, as promised by this G7 agreement, that could encourage large multinational companies to stay in the United States, even with higher taxes than in other parts of the world.

Facebook Amazon Google publicly praise historic G7 agreement

The official announcement by the British government called the deal " seismic, "adding that it meant that"the biggest multinational tech giants will pay their fair share of taxes in the countries in which they operate." However, it did not explicitly name the specific companies that will be affected.

U.S. Treasury Secretary Janet Yellen has stated that the agreement represents a "significant and unprecedented commitment."

"That global minimum tax will end the race to the bottom in corporate taxation, and ensure equity for the middle class and workers in the United States and around the world," said Yellen, who is in London to participate in the talks.

Facebook Amazon Google publicly praise historic G7 agreement: The President of the Government, Pedro Sánchez, has welcomed the agreement reached by the G7 through a message on his Twitter account. "We are moving towards a new tax system for the global digital age, "said Sánchez, also stressing that the G7 reaches a historic agreement"that will allow a greater contribution from large global companies."

"The objective: a better distribution of wealth to achieve greater levels of social justice," Sánchez said.

Facebook Amazon Google publicly praise historic G7 agreement: The six big tech companies-Microsoft, Amazon, Facebook, Google, Netflix and Apple - have long been accused of evading the payment of tens of billions of euros in taxes in the last decade on billions in revenue as can be intuited from the figures reported in the annual financial reports, as The Guardian recalls.

"Facebook has long called for reform of global tax rules and we welcome the significant progress made at the G7," Nick Clegg, Facebook's vice president of global affairs, said in an e-mail statement.

"We believe that an OECD-led process that creates a multilateral solution will help bring stability to the international tax system. The G7 agreement is a step forward in the effort to achieve this goal," an Amazon spokesperson told Reuters.

"We strongly support the work being done to update international tax rules. We hope that countries will continue to work together to ensure that a balanced and lasting agreement is soon concluded, " a Google representative also added to Reuters.

Facebook Amazon Google publicly praise historic G7 agreement

"Today's agreement is a significant first step towards certainty for businesses and strengthening public confidence in the global tax system. We want the international tax reform process to succeed and recognize that this could mean Facebook paying more taxes, and in different places," added Clegg.

Ursula von der Leyen, president of the European Commission, said that the bloc has promoted "modernisation and greater international cooperation in corporate taxation". "This agreement is a great step towards equity and equal conditions," he said.

Others have been less enthusiastic. Oxfam, for example, claims that the G7 agreement "sets the bar so low that companies can step over it," according to Reuters.

"It is absurd for the G7 to claim that it is 'reviewing a broken global tax system' by setting a global minimum tax rate for companies that is similar to the soft rates applied by tax havens like Ireland, Switzerland and Singapore," the charity sums up.

Facebook Amazon Google publicly praise historic G7 agreement

More news:

The G7 is one step away from reaching a historic agreement to establish a global minimum corporate tax

The G7 is holding a summit these days in London attended by finance ministers from the United States, Great Britain, Italy, France, Germany, Japan, Canada and Russia, which are the member countries of this group that brings together some of the most powerful economies in the world.

The creation of a global minimum corporate tax is one of the central points of the summit. A measure that would especially affect technological giants such as Amazon, Microsoft or Google and that would be key to chart the course of the new taxation required by the digital world.

Despite the initial reluctance of some nations, the agreement can come out of this summit. The English Finance Minister, Rishi Sunak, already anticipated before the start the need for a global agreement that regulates digital taxation so that companies "pay the right amount of taxes in the right place".

"If we agree on the minimum tax for companies, this will help us get out of the downward race we see with taxes today," said Olaf Scholz, German Finance Minister. "This will help the countries in which we live to finance their tasks, and-especially after the covid crisis and all the money we spend-to defend people's health and defend the economy," he summed up.

The ministers of the participating nations hope to be able to reach an agreement on this minimum corporate tax, the rate of which would be susceptible to a rise by each country according to their preferences and needs.

The 15% could be established as a starting point in this agreement, because although some countries like France consider it a low rate, nations like the United States or Germany see the figure as a good starting point for each country to decide from there.

The final details of the minimum corporate tax will be discussed on 11 June in Cornwall at a meeting between the G7 heads of State and Government. It will only be a first step towards the G-20 summit to be held in Venice next July where an agreement with a true global scope could be born.

Meanwhile, the United States continues to clash with some European allies-including Spain - due to the establishment of a tax on technology giants that the Biden Administration considers excessive, and that it has decided to punish using international trade. For the moment, of course, it has decided to freeze for 6 months the new tariffs imposed on Spanish, Turkish, Austrian, Indian and British products.

At the same time, the OECD is also working on a reform of the tax system at the international level, which provides greater equity and prevents large companies from evading paying taxes in some countries, trading in others with lower rates.