The agreement aims to force large, profitable multinational companies to pay taxes where they operate – not just where they base their headquarters. For many years, large MNCs – especially tech companies – have been accused of not paying enough taxes or shifting profits overseas to avoid taxes. US Treasury Secretary said the deal would end the practice of countries racing to the bottom on corporate taxation, Reuters said. She also said that European countries would repeal their digital services taxes because of it.
— Secretary Janet Yellen (@SecYellen) June 5, 2021 The US, which is part of the G7, has been threatening to slap punishing tariffs on six countries, including fellow G7 members Britain and Italy, over their digital taxes. The UK previously defended its digital tax as “reasonable, proportionate and non-discriminatory.” (Source: G7, Reuters, CNBC. Header image: Janet Yellen / Twitter.)
