The United Kingdom is “cautiously optimistic” that the G-Group of developed countries may agree to a broader outline of a global agreement on taxing multinationals after intense negotiations in recent times, according to negotiators.
The finance ministers are scheduled to meet in London on Friday and Saturday and are ready to announce a new policy on international corporate taxation, people told FT.
An aide to UK Chancellor Ishii Sunak, who will host the talks, said they were “cautiously optimistic” that an agreement could be reached, adding that “we feel good about it”.
The proposed government would create a new right based on their outlets in both countries and the 15 percent of the lowest effective corporate tax rate worldwide, which would increase the amount of money in the United States.
The pressure on Washington to accept a deal has intensified in recent days. A source close to the talks told the Financial Times that US ambassadors around the world had called on President Biden to support the plan, calling it a “top priority”. The objectionable countries are being told by US representatives that “this is not a tax issue; this is about us.” [countries’] Relationships ”.
On Wednesday, Washington announced retaliatory tariffs on six countries that introduced their own digital tariffs, in addition to the tariffs it has already appealed to France for the same reason.
However, the US Trade Representative, Catherine, has suspended sanctions for six months in an attempt to make room for an international agreement.
A Spanish budget ministry official said: “The fact that the United States has suspended tariff increases reflects its interest in agreeing to the agreement.”
Countries, including the United Kingdom and France, have refused to recover their own digital taxes unless the United States agrees to an agreement, but also enforces it through Congress.
Paris spelled out on Thursday that it would not withdraw its taxes until the new global tariffs were enforced by the United States.
“We should take it back [national] Taxes were introduced when new taxes were introduced to avoid a break in tax collection, a French official said. “Technology companies have benefited from this [pandemic] Crisis. . We want to take [their] Additional profits and it will be shared between the countries where the company is based and where it operates. “
This poses a subtle sequencing challenge to negotiators: countries are unwilling to withdraw their own tariffs until a new international system is in place.
The G7 leaders are expected to hold more detailed discussions at their summit in Cornwall a week after any deal is struck this weekend.
The remaining sticking points are a detailed definition of the rules that will apply to multinational corporations and concerns about where they will pay tax on the basis of sales or profits.
According to the aforementioned person with knowledge of negotiations, there is some tension over which agreement will be formally effective.
The UK is “extremely pressing” to close the deal at the G7 summit, but other G7 members, including the United States, Italy and Japan, are reluctant to go further than declaring a common position because the G20 has a formal mandate to negotiate – sponsored by the OECD. Is managed by – and any deal should not be settled by the big economy alone.
The FT has reformed trade secrets in a new way, which should be read in the daily briefings on the changed face of international trade and globalization.
Register here Understand which countries, organizations and technologies are shaping the new global economy.
Additional report by Daniel Dombe in Madrid