UK swings global tax rules to exempt financial servicesEuropost
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.