Chancellor Rishi Sunak has said he is “confident” of reaching an international agreement on taxing the tech giants as he welcomes his counterparts to London for the G7 finance meeting.
Ministers from the US, Japan, France, Canada, Germany and Italy began the two-day meeting at Lancaster House in London on Friday morning, ahead of next week’s G7 leader’s summit in Cornwall.
Mr Sunak has said a US proposal to focus on the world’s 100 most profitable digital firms in a global tax deal could work – but he has insisted that tech firms pay more tax in countries where they operate.
“It’s certainly something we can work with as long as it meets our objectives of getting at the right companies, and on the face of it, it can,” the chancellor told Reuters ahead of the meeting. “We just need to work through the details.”
Tax campaigners hope the G7 nations can help close loopholes which have allowed companies such as Google and Amazon to avoid high taxes by placing much of their profits offshore.
The US government announced tariffs on around £1.4bn-worth of imports from the UK and five other nations earlier this week over their plans to tax US-based tech giants.
But president Joe Biden’s administration immediately suspended the tariffs to allow the G7 finance negotiations to play out.
Mr Sunak said he is “hugely optimistic” about the G7 delivering “some concrete outcomes” this weekend. But the chancellor is under huge pressure to agree to a new, global minimum corporation tax rate.
Last month the US put forward a plan for a “floor” of 15 per cent for the tax, while calling for discussions to continue to “push that rate higher”. All the G7 nations – except for the UK – have issued their support for the 15 per cent proposal.
Chancellor Rishi Sunak prepares to welcome G7 finance ministers
The Labour Party has called on Mr Sunak to “publicly endorse proposals for a global minimum corporate tax rate” during the G7 finance meeting.
Ahead of the two-day summit, finance ministers from France, Germany, Spain and Italy have co-signed an open letter urging an agreement on corporation tax which would be “fit for the 21st century”.
Speaking ahead of the G7 meeting, Mr Sunak said: “Securing a global agreement on digital taxation has also been a key priority this year – we want companies to pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners.
“I’m determined we work together and unite to tackle the world’s most pressing economic challenges – and I’m hugely optimistic that we will deliver some concrete outcomes this weekend.”
Although Mr Sunak, any announcements on any tax agreements is expected to be delayed until Boris Johnson and other G7 leaders meet in Cornwall next week.
