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U.S. tech giant shares barely react to G7 tax deal

Shares in U.S. tech giants a notch lower after landmark G7 tax deal
Shares in U.S. tech giants a notch lower after landmark G7 tax deal   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Thyagaraju Adinarayan</p> <p><span class="caps">LONDON</span> -Shares in U.S. technology giants barely reacted on Monday to a landmark global minimum corporate tax deal agreed between the world’s richest nations, with analysts saying it will take the backing of low-tax nations to have any meaningful impact on the companies’ bottomlines.</p> <p>The Group of Seven (G7) advanced economies agreed on Saturday to back a minimum global corporate tax rate of at least 15% and the focus now shifts to the G20 countries for a wider agreement on the new tax proposals.</p> <p>Analysts say the tax deal wouldn’t hurt companies unless it’s agreed with tax-haven countries such as Ireland, whose economy has been booming with the influx of billions of dollars in investment from multinationals due to lower taxes.</p> <p>Shares of Facebook, Amazon.com, Apple, Microsoft and Google-parent Alphabet were all down between 0.4% and 0.7%. Europe’s tech stocks index was flat.</p> <p>“The details of the implementation are still to be ironed out and potentially further watered down,” said Marija Vertimane, senior strategist at State Street Global Markets.</p> <p>Dublin, which has resisted European Union attempts to harmonize its tax rules, is unlikely to accept a higher minimum rate without a fight.</p> <p>“I would treat the current proposal as a small positive for the market,” Vertimane added pointing to levies being lower than what was initially discussed.</p> <p>The G7’s proposals are seen targeting technology companies that sell services remotely and attribute much of their profits to intellectual properly held in low-tax jurisdictions.</p> <p>“The immediate market implications are likely to be minimal,” said Ian Williams, economics & strategy research analyst at Peel Hunt.</p> <p>“No G7 nation currently charges that low a rate and the details, including agreement from numerous smaller countries, require plenty of work.”</p> </div>