This week, the Chancellor agreed historic global tax reforms with our G7 partners that will ensure that large global firms pay their fair share towards public services and will pave the way towards a global economic recovery that works for everyone.
Working with our G7 partners, the Chancellor agreed changes to create a new, fairer tax system fit for the 21st century, with a minimum global corporation tax and new rules to ensure that large global firms and tech giants pay a fair share of profits in the countries where they do business. The global tax system needs to be fit for the digital age, and as hosts of the G7 the UK government has been pushing for a new system that means that the right companies pay the right tax in the right places. This historic agreement will pave the way towards a global economic recovery that works for everyone, with multinationals paying more towards our public services in the UK as we build back better.
Commenting, MP for North East Bedfordshire and member of the Business Select Committee, Richard Fuller said:
Rishi Sunak has worked hard to achieve an agreement that can limit the opportunities for large, usually technology-based multinationals to move profit recognition from the countries where they do business to those countries that have lowest or nil tax rates.
Twenty or so years ago, governments were falling over themselves to offer low tax rates to attract these large businesses to their shores. For a time it worked but increasingly the aberrations of the system have become grotesque. The UK government should always keep control over its ability to set tax rates but a floor of 15% in a treaty to achieve wider tax accounting changes seems like a reasonable outcome to me, but let's see how it works in practice.
On technology taxes, we could have gone further and I am concerned that there are too many loopholes for global tech giants to use our data to create excess profits and unfair competitive advantage. The UK competition regulator needs to push forward with further enquiries and reform.