INDEX	Saturday June 5, 2021
Beware of Yanks bearing gifts
The Americans like to think of themselves as the new Romans, and with an economic empire spanning much of the globe you can see why. However they have recently decided they want to be the Greeks as well, and as anyone who has come across Homer (no, not the Simpsons) knows, one should beware of Greeks bearing gifts. The gift the Yanks are offering is a 15% profit tax on international corporations, which sounds great until you read the small print. In exchange for this presumed largesse we have to give up any attempt to actually tax the monsters by our own devices. My resolution on a way to force the giants to pay taxes (click taxes) came 17th in the Labour Party's priorities ballot at the national conference in 2019. Not a bad result but not quite enough to get it discussed. A pity, because if the UK government signs up to the deal we have to renounce click tax. I don't say Joe Biden reads my blog, but he might do... One problem with taxing the behemoths is that even the so called experts don't really know if they are making a profit or not. Take Netflix (and the way its shares were performing earlier this year you might be able to pick it up for a decent price) is it making a profit? Even the experts seem to be very cautious. And apportioning exactly where that profit is made (if there is a profit) when invoices are issued from liechtenstein or who knows where, is going to keep the tax person happily busy for generations. As well as that old saw 'beware Greeks bearing gifts' there's another which goes something like 'once Biden twice shy...'		The following was extracted in breach of FT.com copyright rules. You are only supposed to publish a link. This is the link https://www.ft.com/content/1c662397-fed5-449b-a630-37dadb4e594a. The article was first published on FT.com on June 5, 2021. Chris Giles and Victor Mallet in London and Emma Agyemang in Copenhagen YESTERDAY : The UK is "cautiously optimistic" that the G7 group of advanced nations can agree the broad outlines of a global deal on taxing multinationals following intense discussions in recent days, according to people with knowledge of the talks. Finance ministers are set to meet in London on Friday and Saturday, and are poised to announce that they have agreed the principles for a new system of international corporate taxation, the people told the Financial Times. Speaking on Thursday evening, UK chancellor Rishi Sunak, who will host the discussions, said: "I'm hugely optimistic that we will deliver some concrete outcomes this weekend." On Friday morning the finance ministers of Germany, France, Italy and Spain released a joint statement in which they said there was an "urgent" need to reach an agreement. The Covid-19 pandemic was a windfall for big tech companies that "raked in profit at levels not seen in any other sector of the economy", and the crisis had exacerbated inequalities, Olaf Scholz, Bruno Le Maire, Daniele Franco and Nadia Calviño wrote. "It is urgent to put in place an international tax system that is both efficient and fair," they said. "Multinationals are able to avoid corporate taxes by shifting profits offshore. That's not something the public will continue to accept. Tax dumping cannot be an option for Europe, nor can it be for the rest of the world." The proposed regime would both create a new right for countries to tax the largest multinationals' profits based on where they make their sales and a global minimum effective corporate tax rate of 15 per cent, which would raise significant sums of money in the US. Remaining sticking points concern the detailed definition of the group of multinationals to which the rules would apply, and whether they would pay tax based on where they make sales or profits.
Posted by Jonathan Brind.
INDEX
Saturday June 5, 2021