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Rishi Sunak calls on Joe Biden to sign up to global tax targeting the mega profits of tech giants


Rishi Sunak calls on Joe Biden to sign up to global tax targeting the mega profits of tech giants such as Facebook and Google

  • Chancellor urges President Biden’s administration to conclude negotiations over the new tax in time for next month’s G7 summit in Cornwall
  • Comes after years of criticism about way tech companies have channelled profits through tax havens to minimise amount they pay on their vast revenues
  • Biden administration has indicated it is prepared to drop its opposition to ‘tech tax’ in return for agreement to introduce new minimum level of corporation tax around world – expected to be set at 15%

Rishi Sunak today calls on the US Government to sign up to a groundbreaking new global tax targeting the super-profits of tech giants such as Google and Facebook.

In an exclusive interview with The Mail on Sunday, the Chancellor urges President Biden’s administration to conclude negotiations over the new tax – which would bring in billions of pounds in extra revenue – in time for next month’s G7 summit in Cornwall.

It comes after years of criticism about the way technology companies have channelled profits through tax havens to minimise the amount they pay on their vast revenues.

The Biden administration has indicated that it is prepared to drop its opposition to the ‘tech tax’ in return for an agreement to introduce a new minimum level of corporation tax around the world. That is expected to be set at 15 per cent.

Rishi Sunak today calls on the US Government to sign up to a groundbreaking new global tax targeting the super-profits of tech giants such as Google and Facebook. In an exclusive interview with The Mail on Sunday, the Chancellor urges President Biden’s administration to conclude negotiations over the new tax – which would bring in billions of pounds in extra revenue – in time for next month’s G7 summit in Cornwall

It comes after years of criticism about the way technology companies have channelled profits through tax havens to minimise the amount they pay on their vast revenues

It comes after years of criticism about the way technology companies have channelled profits through tax havens to minimise the amount they pay on their vast revenues

Mr Sunak says the tech tax – which will be determined by the profit margins enjoyed by the world’s biggest companies – is necessary because ‘the global tax system isn’t working’.

He adds: ‘The right companies aren’t paying the right tax in the right places.

‘That’s not fair and that’s something that I want to fix.’

The G7’s foreign ministers will meet in London at the end of this week to discuss the proposed deal, ahead of the leaders’ summit a week later.

Calling on the US to sign up, Mr Sunak says: ‘We understand why an agreement on global corporation tax is important for our American friends. We need them to understand why fair taxation of tech companies is important to us.

‘There’s a deal to be had, so I’m urging the US – and all of the G7 – to come to the table next week and get it done.’

The Treasury is also examining plans to help protect the traditional high street and raise further revenues through an online sales tax levied on items bought over the internet for home delivery.

Mr Sunak’s intervention came as a cache of emails and letters obtained by The Mail on Sunday revealed how:

  • Former Deputy Prime Minister Sir Nick Clegg has been transformed into a key fixer for Facebook;
  • Sir Nick led a team of Facebook executives who sought to protect the tech giant’s vast profits from the threat of new taxes – despite previously suggesting the firm should pay more;
  • As Mark Zuckerberg’s right-hand man, the former Lib Dem leader launched a charm offensive to win over power brokers in the EU, telling one senior official: ‘It’s good to have a European and a liberal in the heart of Silicon Valley!’ During his interview, Mr Sunak said negotiations with the US were ‘going well’, adding: ‘There’s a big prize here but we need to stick to our guns to get it over the line…

‘Large multinational companies, particularly digital companies, are able by the nature of their businesses not to pay the right tax in the right places. That’s not fair and that means there isn’t a level playing field with high street businesses.’

Under the terms of the US plan, if a company such as Facebook tried to channel its profits on its UK operations through a haven with a rate of 1 per cent, for example, the UK Government would be able to force it to pay the 14 per cent difference.

The move would hit countries such as Ireland, which has tried to attract businesses by fixing its rate at 12.5 per cent.

UK corporation tax is 19 per cent, but will rise to 25 per cent by 2023 to help repair the damage caused by the pandemic.

Calling on the US to sign up, Mr Sunak says: 'We understand why an agreement on global corporation tax is important for our American friends. We need them to understand why fair taxation of tech companies is important to us.' (Above, Joe Biden in March)

Calling on the US to sign up, Mr Sunak says: ‘We understand why an agreement on global corporation tax is important for our American friends. We need them to understand why fair taxation of tech companies is important to us.’ (Above, Joe Biden in March)

A total of 137 countries are involved in discussions about the tech and corporation taxes through the Organisation for Economic Co-operation and Development.

As part of further efforts to clip the wings of the tech giants in the UK, the Government has set up the Digital Markets Unit regulator to ensure fair competition in digital advertising.

Ministers are also examining whether to force the companies to pay newspapers for any articles which they reproduce, similar to a system that has been introduced in Australia.

Google and Facebook last year took 80 per cent of the £14 billion spent on digital advertising in the UK in 2019, while national and local newspapers took just 4 per cent.

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