Solidarity with the G7 will cost Britain hundreds of millions of dollars

2 weeks ago

A new G7 plan on taxation of international companies backed by London will allow American IT giants Google, Amazon and Facebook to pay less tax in Britain than they do now. This is evidenced by the calculations of the activist group TaxWatch.

The study found that the changes could cost Britain’s coffers about 230 million pounds (about $325 million) a year from four major U.S. IT firms. Facebook, Google, eBay and Amazon now pay about 330 million pounds (about $466 million) in digital services tax to the U.K. budget. The tax was introduced last year as a temporary measure until an agreement can be reached at the global level.

Solidarity with the G7 will cost Britain hundreds of millions of dollars

If the G7 plan is implemented, the tax bill for those companies in Britain would drop to around 100 million pounds ($141 million). The TaxWatch study is based on the companies’ 2019 filings, the most recent data available, as well as published official information about the G7 arrangements. “It looks like a good deal for the U.S., they will be able to collect more taxes from their international companies and protect themselves from them going offshore, taking the arrangements to a global level. The fact that Facebook and Google will end up paying less tax in Britain under this deal is controversial, I guess there’s no getting away from that. That’s not what this was all about,” said TaxWatch director George Turner.

Meanwhile, sources say that Britain and European Union countries continue to discuss the possibility of collecting more taxes from American digital companies in the run-up to the next important event for reform – the G20 summit.

The G7 countries reached agreement on changes to the taxation of large corporations on June 5 at a meeting in London. The agreement suggests that companies will pay taxes in the markets where they sell. Also there should be a minimum level of tax on profits of big companies – 15 percent. Experts have already pointed out that there are omissions in the G7 deal, which, for example, could allow American Amazon to avoid new payments.