Big Tech may face some of the most significant consequences of the proposed 15% minimum corporate tax rate, which finance ministers for the G7 countries backed on Saturday.
Finance Minister Janet Yellen told reporters that companies covered by the G7 deal “will include big, profitable companies” such as Amazon and Facebook.
“And these companies, I believe, will meet the requirements of almost any definition,” she added.
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Still, the big technology companies have expressed support for an international deal.
Nick Clegg, Facebook’s vice president of global affairs, said on Twitter that the company “has long called for reform of global tax rules and we welcome the important progress made in the G7.”
“We want the process of international tax reform to succeed and recognize that this could mean that Facebook pays more taxes in different places,” he wrote.
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An Amazon spokesman also called the agreement a “welcome step forward”, saying in an email to FOX Business that the company supports a process led by the larger Organization for Economic Co-operation and Development, an economic group of 38 countries.
“We believe that an OECD-led process that creates a multilateral solution will help achieve stability in the international tax system,” said an Amazon spokesman.
OECD members include countries with lower tax rates, such as Ireland, which has attracted hundreds of US businesses with a 12.5% corporate rate, according to the American Chamber of Commerce Ireland. These companies have invested $ 444 billion in Ireland alone, something the country is unlikely to want to risk giving up, in line with the higher rate.
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A Google spokesman also said the company “strongly” supports updating international tax rules in a statement to Reuters.
“We hope that the parties will continue to work together to ensure that a balanced and lasting agreement is finalized soon,” the Reuters spokesman said.
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Other major technology businesses, including Apple and Microsoft, did not immediately respond to inquiries from FOX Business.
The Biden administration supported an international minimum of 15%. Currently, the US interest rate is 21%, and the administration has expressed a desire to raise it to 28%. But any plan will still need the approval of Congress, which has so far eluded the administration because of the Republican opposition.
Yelen said on Saturday that the agreement could help “end the existing harmful dynamics” of countries competing to attract business by offering ever lower tax rates.
“This global minimum will put an end to the race to the bottom of corporate taxation and provide justice for the middle class and working people in the United States and around the world,” she said.
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She added: “The global minimum tax will also help the economy thrive by leveling the playing field and encouraging countries to compete on a positive basis, such as educating and training our workforce and investing in R&D and infrastructure.”
The G7 countries are the United States, Canada, France, Germany, Italy, Japan and the United Kingdom.
Jonathan Garber and Reuters of FOX Business contributed to this report.