Global tax deal must include tech giants, says Treasury source

The comments were made ahead of the UK-hosted G7 Trade Ministerial meeting

The UK's Treasury department has stated that any global agreement on the minimum tax rate paid by corporations must include tech companies.

An anonymous government source made the comments to Reuters ahead of the UK-hosted G7 Trade Ministerial meeting this week, which takes place today and on Friday and is to include the trade ministers of Canada, France, Germany, Italy, Japan, US, and the EU.

The HM Treasury source told the publication that the UK's "consistent position has been that it matters where tax is paid". 

"Any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities," they said, adding that they "welcome the US's renewed commitment to tackling the issue and agree that minimum taxes might help to ensure businesses pay tax – as long as they are part of that package approach".

Last year, it was revealed that three US companies – Facebook, Google, and Microsoft – could be avoiding as much as £2.1 billion in tax by exploiting loopholes in developing countries.

Taxing tech giants has been a contentious issue between the UK and the US, with the latter recently considering implementing a 25% tariff on a selection of British goods that enter the country in retaliation to the former's digital services tax (DST).

Related Resource

Reduce management overhead by transforming VDI and app management

How to support a distributed workforce with VMware Horizon Control Plane

Reduce management overhead by transforming VDI and app management  - whitepaper from VMWareDownload now

Although the source of the statement hasn't been named, the government said on Thursday that International Trade secretary Liz Truss would "push for collective G7 support for the creation of rules governing digital and data trade".

At today's G7 Trade Ministerial meeting, Truss is expected to deliver a speech in which she will mention that the UK wants to use its G7 Presidency "to address the fundamental issues facing global trade".

"Like-minded democracies need to lead the charge on trade reform, because if we don't then there is a very real danger that global trade fragments and that fewer countries end up playing by the rules," she will say.

Truss will also tell attendees of the meeting that "international trade only works when it is fair and when countries submit themselves to a common set of rules"  and that as a result, the world needs "a more modern and dynamic WTO".

Featured Resources

Consumer choice and the payment experience

A software provider's guide to getting, growing, and keeping customers

Download now

Prevent fraud and phishing attacks with DMARC

How to use domain-based message authentication, reporting, and conformance for email security

Download now

Business in the new economy landscape

How we coped with 2020 and looking ahead to a brighter 2021

Download now

How to increase cyber resilience within your organisation

Cyber resilience for dummies

Download now

Most Popular

How to find RAM speed, size and type
Laptops

How to find RAM speed, size and type

16 Jun 2021
EU plans to launch bloc-wide cyber task force
cyber attacks

EU plans to launch bloc-wide cyber task force

22 Jun 2021
What is HTTP error 400 and how do you fix it?
Network & Internet

What is HTTP error 400 and how do you fix it?

16 Jun 2021