France pushes for 25% target for taxing multinationals’ super-profits

imageEconomy8 hours ago (Jul 10, 2021 19:36)

© Reuters. FILE PHOTO: Office buildings are seen at the financial and business district of La Defense, amid the outbreak of the coronavirus disease (COVID-19), in Paris, France, November 9, 2020. REUTERS/Benoit Tessier

VENICE (Reuters) – Countries should be able to tax a quarter of big multinationals’ profits no matter where they are earned, France proposed on Saturday at a G20 finance ministers meeting focused on overhauling the rules for cross-border corporate taxation.

Key details remain to be hammered out after G20 finance chiefs formally endorsed the outline of plans that would make new rules for where multinationals get taxed and set a global minimum corporate tax rate of 15%.

The emergence of digital commerce has made it possible for big tech firms to book profits in low-tax countries regardless where they money is earned.

The rules, to be finalised at a Rome summit in October, would allow countries where revenues are earned to tax 20-30% of a big multinational’s excess profit – defined as profit in excess of 10% of revenue.

Developing countries, such as Brazil, have been pushing for a higher share, EU Economics Commissioner Paolo Gentiloni said at the meeting.

“I think that the best solution would be a level of allocation of profit of 25% to meet the concerns of some developing countries which are legitimate concerns,” French Finance Minister Bruno Le Maire told reporters.

Companies considered in scope for the new rules would be multinationals with global turnover above 20 billion euros ($23.8 billion), although the turnover threshold could come down to 10 billion euros after seven years following a review.

Gentiloni said some countries were pushing for the 10 billion threshold while others wanted to exclude some industrial sectors from the scope of the new rules, in addition to financial services and mining industries which are already exempt.

($1 = 0.8422 euros)

France pushes for 25% target for taxing multinationals’ super-profits

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Please enter your comment!
Please enter your name here