PARIS (Reuters) – the Government will be given more power to the load is to large, multinational companies such as Google, Apple and Facebook are doing things in their own countries, in the context of a proposal for the revision of the decades-old rules and regulations.
FILE PHOTO: The logo of Amazon, Apple, Facebook, and Google, are seen in a combination photo from the Reuters files. – REUTERS
The big internet companies have been pushing the tax rules to the very limit, as they can book profits and park assets, such as trademarks and patents in low-tax countries such as Ireland, where their customers are.
The drive to be a global rule book and a new sense of urgency for countries to unilaterally adopt, on its plans for a new tax on digital companies, frustration with the current rules and regulations.
This year, more than 130 countries and territories, agreed to a rewrite of the tax rules are largely going back to the 1920’s, it was too late, and is in charge of the Paris-based Organisation for Economic co-operation and Development (OECD) to come up with a proposal.
“The current system is under stress and will not survive if we do not remove the tensions,” the OECD’s head of tax policy, Pascal Saint-Amans told journalists.
The OECD is expected to be the first to sign on to the question of whether there is broad political support behind their proposals the following week, when the finance ministers of the Group of 20 economic powers, to be discussed at a meeting in Washington dc.
The review would have an impact of a few percentage points of corporate income tax in many states of the us alongside major international investment hubs, ” Saint-Amans said.
While this means that countries such as the republic of Ireland or offshore tax havens, would be adversely affected, the countries with large consumer markets such as the United States of america and / or France would benefit from a shake-up.
France has its own national tax on digital companies this year, sparking U.S. security threats in the price of French wine, and add it to the global market pressure.
In the meantime, companies are faced with increased uncertainty over their tax bills if the countries are to challenge the arrangements to pay tax in countries such as the republic of Ireland, in the place of a true free market.
Apple has been locked in an EU-taxes in dispute about the profits, and that could cost the iPhone maker $14 billion. In the mean time, Google agreed last month to pay more than $1 billion for the settlement of a tax matter in France.
In the Amazon, that of the European Union, has been told to pay 250 million euros of income tax in Luxembourg, according to the OECD’s proposals were a “significant step forward”.
Shares in Apple APPS.Oh, and the Characters (GOOGL.(O), the parent company of Google, Facebook (FB.O) and Amazon (AMZN.(O) to open higher on Wednesday, as the latest reports in the media have raised hopes of progress in relations between the United States and China.
THE TAX REVOLUTION
The OECD’s proposals to set up an area in front of the companies, which are subject to the new rules, which will determine how much of the things they need to do to be in a state to be taxable there, and to determine the amount of income that can be taxed.
The goal is to provide the government with which the user or customer of a company, a product, is it right to tax a greater share of the profits earned by a foreign company.
The companies affected would have to be the large multi-national companies operating across borders, with the OECD, that suggests they have to have a turnover of around 750 million euros ($821 million).
It could also be a “sustainable and significant” interaction with the customers in the market, regardless of whether or not they have a physical presence or not.
Not only the large companies can be covered, but also for the consumer businesses, and the sale of retail products in the market place by means of a distribution network, which they may or may not be his own.
Companies that comply with these conditions, it would then be liable for income tax in the country, according to a formula that is based on a fixed percentage of the profitability that is yet to be negotiated.
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- The U.S.-china trade war and cut off from the world-wide growth, and for a half-point next year, and Le Maire.
A French Finance Ministry official said that the Washington meeting should provide the necessary political guidance in order to come to an agreement on an international tax system by 2020″.
After Washington, the wider negotiations will continue, with the aim to outline the agreement of the 134 countries that have signed on to the reforms in January.
The proposals, published on Wednesday, running in parallel with a second track of the reform process is also facilitated by the OECD, which aims to reach an internationally agreed minimum rate of corporation tax, companies will not be able to prevent it.
Reporting by Leigh Thomas; Additional reporting by Foo Yun Chee; Editing by Christian Lowe and Alexander Smith