Historic Move To Tax Multinational Companies Welcomed By Cumbrian Firm
Rishi Sunak and his G7 counterparts have reached a historic deal to make large multinational companies pay more tax in the countries they operate in.
On Saturday the G7 group agreed on a minimum corporation tax rate of 15%. However, some countries would like this rate to be higher, in the UK for example the current corporation tax rate is 19%, but this will rise to 25% by 2023 as the Government try and cover the spending on the pandemic.
Peter Ellwood, managing partner at robinson+co said: “For many years Multinationals have moved their branches to Countries with low corporate tax rates and declared most of their profits in that Country. This means they only pay the local rate of tax, even if the profits mainly come from revenue made elsewhere. This is legal and commonly done.
Robinson+co have offices across West Cumbria and work with all kinds of businesses from sole traders right through to large corporations and know the importance of large companies paying their fair share of corporation tax.
“The deal announced on Saturday, between the US, the UK, France, Germany, Canada, Italy and Japan, plus the EU, could see billions of pounds flow to governments to pay off debts which have been incurred during the Covid-19 pandemic. This announcement, which has been years in the making, will now put pressure on other countries to follow suit, including the G20 (which includes China, Russia and Brazil) who meet next month.
“In the past, many Countries have thought that this agreement was unobtainable. However, many countries now need to cover the cost of the pandemic and they see this as a good starting point. There is still a lot of work to be done but the G7 has made a good start.”