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G20 Finance Ministers call for creation of digital tax

G20 Finance Ministers call for creation of digital tax

Top G20 finance officials agreed on 08 June that there was an urgent need to find a global system to tax internet giants like Google and Facebook, but clashed on the best way to do it.

Background:

The G20 has tasked the Organisation for Economic Cooperation and Development (OECD), to fix the system that has seen some internet heavyweights take advantage of low-tax jurisdictions in places like Ireland and pay next to nothing in other countries, where they make huge profits.

OECD chief, Angel Gurria is presenting G20 finance ministers and central bank chiefs meeting over the weekend in the western Japanese city of Fukuoka with a "roadmap", already signed off by 129 countries, in a bid to clinch a long-term solution by 2020.

The representatives from Japan, US, China, France and the UK supported modifying their current regulations that allow digital giants such as Amazon, Google and Facebook to be taxed where they are headquartered, and instead implement taxes based on their revenue and number of users in every market where they operate.

Ministers are weighing the possibility of a new tax policy based on the amount of business a company does in a country, not where it is headquartered.

But there are rival proposals in the mix, including a wider US-led approach that could affect European and Asian multinationals in other sectors than technology.

G20

The G20 is an international forum for the governments and central bank governors from 19 countries and the European Union.

G20 Ministerial Symposium was held in Japanese city of Fukuoka.

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