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UK says global tax deal must tackle tech giants

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By William James and David Milliken

LONDON -Britain said on Thursday that any global deal on a minimum corporate tax rate must ensure that large tech companies pay their fair share of tax, a day before it hosts an online meeting of G7 finance ministers and central bankers.

The United States proposed last week that multinational companies’ profits should be taxed at a minimum rate of 15%, less than an initial proposal of 21%, drawing public support from Germany and France.

But Britain, which is chairing meetings of the Group of Seven rich nations this year, has been more cautious. Finance minister Rishi Sunak is keen that large tech giants with overseas headquarters pay more tax in the United Kingdom.

“Our consistent position has been that it matters where tax is paid and any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities,” a British finance ministry source said on Thursday.

“We welcome the U.S.‘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,” the British official added.

French finance minister Bruno Le Maire called on Thursday for countries to reach an agreement on a minimum tax rate next week, when Sunak will host an in-person meeting of finance ministers in London from June 4-5.

“At London’s G7, the world’s most powerful economies (…) must say: we agree on a new international tax, including a digital tax and a minimum tax. This will give a strong push so that at the G20 in Venice, in mid-July, a deal can be reached,” Le Maire told French radio.

Tax is not due to be discussed in depth at this Friday’s online meeting of G7 finance ministers and central bankers.

A draft agenda points instead to a focus on the global economy, reducing greenhouse gas emissions and digital payment technology such as central bank digital currencies.

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