UK swings global tax rules to exempt financial services

Photo: EPA Rishi Sunak

UK scored a decisive win over the global tax rules, agreed at the G7 summit earlier last month, Reuters reported. London managed to earn an exemption for financial services from a new global tax system. The new global corporate taxation was planned to press multinational companies to pay more. However UK Treasury Secretary Rishi Sunak passed a deal for financial service firms to be exempt to help protect the City of London's largest banks from paying more tax.

The FT elaborated that the Organisation for Economic Co-operation and Development, which is leading the reform of the global tax rules for companies, had accepted Britain's case. The new global tax rules are designed to make companies pay more tax in countries where they operate. Banks do typically pay taxes locally on profits made in different jurisdictions, the OECD said in a paper published in 2020.

All G7 countries have supported a proposal from the US for a global minimum corporate tax rate of 15% that could raise $50-$80bn for governments around the world. Germany, France, Italy and Spain said the commitment to a minimum 15% tax rate is "a promising start". The financial leaders of G20 are expected to back the minimum corporate tax deal reached by the G7 wealthiest countries at a meeting scheduled for 9-10 July.

Similar articles

  • Bundesbank President Weidmann wants a limited role initially for digital euro

    Bundesbank President Weidmann wants a limited role initially for digital euro

    A digital euro, currently under design by the European Central Bank, should have a limited role initially as it could disrupt the bank sector and overly extend the role of central banking, Bundesbank President Jens Weidmann said on Tuesday, cited by Reuters. "A gradual approach might make sense given the risks involved – that means a digital euro with a specific set of features and the option to add further functionalities later," Weidmann, who is member of the European Central Bank (ECB) Governing Council, told a conference.

    66
  • European banks book €20bn in tax heavens

    European banks book €20bn in tax heavens

    The European banks are very far from halting operations with tax heavens to book their profits. This practice was little changed since 2014 even after country by country disclosures are becoming mandatory, the EU Tax Observatory noted in an official report.

    65
  • PayPall allows crypto deals for UK clients

    PayPall allows crypto deals for UK clients

    The payments platform PayPal announced it would allow its clients based in UK to buy and sell cryptocurrencies. Until now PayPal only allowed its US customers to trade in crypto asstets. The company sees its UK expansion in digital money trading as a milestone in its cryptocurrency services, Reuters reported.

    80