Figarovox / Interview – G7 brings together finance ministers and announces at the end of the summit that they will create global taxes for the big multinationals. Sebastian Lay understands the stakes of an action aimed at tackling tax bases and taxing the digital giants.
Sebastian Leigh is an associate researcher at the Thomas More Institute and president of the Four Pillars Party.
Figarovox. – The finance ministers of the G7 countries have announced that they will impose global tax rates on large multinational corporations. Many welcome the “historic” decision, do you share this opinion?
Sebastian Lay. – Considering the purpose of the fight against tax evasion, this is a historic moment. Unfortunately, this was not due to France’s attempts to consolidate within the G7 (each of which has gone largely inefficiently out of its small digital tax or financial transactions in recent times), but to the only American power that Biden has come to power. Highlighted his own reform. Ironically, Trump has already encouraged American companies to repatriate some international profits against a single, relatively painless tax (which brought in $ 1,000 billion in corporate profits to the United States). Even if there is a gap between this theoretical minimum tax (15%) and the US rate, Biden will complete this financial relocation, which will rise to 25-30 percent according to his plans. This reform mainly attacks the digital giants who register tax boxes at tax centers: the question of bringing profits closer to their tax by making tax cuts ineffective. The acceleration of this issue in a few months is unprecedented in the case of international tax reform, but it is from the digitization and dematerialization of our economy during the Kovid period.
The 15% limit is high enough to destroy the concept of a tax haven. It is only a question of reconnecting a dematerialized economy with tax systems that is still anchored in physical activity.
The tax rate has so far been fixed at 15%. Will this slow down the race for tax cuts and allow an effective fight against tax bases?
Some, like Oxfam, explain a much lower rate. On the contrary, I welcome this common sense decision because a state has the right to consolidate its competitiveness, attract investment and achieve relatively low rates, for example Ireland. Between 15% and 32% (all-inclusive) French at this rate, there is room for intrigue for different models. In addition, we should not overestimate the share of corporate taxes in our French tax revenue, for example: 35 35 billion; IS represents much less than VAT, CSG and IR. At the same time, the 15% limit is high enough to destroy the concept of a tax haven. It is only a question of reconnecting a dematerialized economy with tax systems that is still anchored in physical activity.
The G7 finance ministers explained in a press release that the right to tax in the world should be better distributed. What does such a move mean?
For digital companies of this magnitude, their profits in England are found in the Virgin Islands. The aim is to better connect the place of economic activity with the national tax system. For example, it was ineffective for Americans to say that the United States should tax the profits of a Google registered in the Netherlands for an activity in France, because the company has historically been American. The distribution of tax rights is not yet complete, but the idea is to connect the profits with the area where they make it, regardless of where they live, and in doing so connect to the tax system of this country. Business.
Anyway, this is a financial discussion cycle that only opens globally and will last for years.
When the G20 summit takes place in July, do you think the G7 countries will succeed in passing the move to other countries, especially China?
As a good heir to the Chinese PC, China does not practice financial dumping, so it does not want to oppose it. Other states may be more responsive, but the United States’ strong commitment to this issue will carry a lot of weight. In any case it is a stage of tax negotiations that is only open globally and will last for years.
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