Plans to introduce a tax on multinational tech giants
A multinational tax would capture IT giants like Amazon and Google, a move which would be welcomed by bricks and mortar retailers in the UK who have long criticised the current tax system, which fails to capture the global multinationals.
There have been early talks with the US head of the Federal Bank Janet Yellen to discuss how a tax on multinationals could be rolled out.
Rishi Sunak, the Chancellor, has said that the multinational tax will be a priority on the agenda for the G7 summit later this year.
It is possible that plans will be published on Tax Day on 23 March when the Treasury plans to release a raft of consultations on potential tax changes.
‘One of my priorities in the G7 this year, which I’ve already started work on, is to try and get international agreement on a new way to tax these companies,’ Sunak said.
‘I spend a lot of time talking to my finance minister colleagues around the world about this issue.’
The UK has already introduced a diverted profits tax which catches some of the largest tech multinationals, but this is a unilateral approach. There is a strong impetus to try to introduce a global treatment of the tax position of multinationals.
The OECD has been working on a major tax project, the Base Erosion and Profit Shifting (BEPS), to review the way multinationals are taxed but has not finalised plans for how the tax framework would change.