The Group of Seven (G7) countries have backed the proposal to impose a common global corporate tax. It would be aimed at preventing multinational businesses from evading taxes and also squeeze the havens which attract tax evaders due to the low-rate jurisdictions. The consensus to adopt a common tax rate was reached at the G7 finance ministers' meeting held in Buckingham (London) on June 5. THE PROPOSAL The tax proposal endorsed by the US, the UK, France and other G7 countries has two parts. The main part of the proposal states that countries around the world should tax their home companies' overseas profits at a rate of at least 15%. The companies have multiple branches spread across various jurisdictions, they transfer the bulk of their profit in accounts set up in countries that offer the lowest tax rate. Often, these tax havens are the Caribbean Islands such as Bahamas or British Virgin Islands, or at times, countries like Ireland where the corp...
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