Global corporate tax: London wants to spare the City

While Amazon could escape international tax reform, London wants to save the City from this global corporate tax.

The City spared from the global tax?

On Saturday June 5, 2021, the financial G7 agreed to implement an international tax reform providing for the introduction of a global corporate tax of at least 15%. London, however, hopes to exempt the City from this new tax. The Financial Times reported Tuesday, June 8, 2021, that the British Minister of Finance was working in this direction with the G7.

The agreement thus provides for the introduction of a minimum 15% corporate tax.. The latter will then have to pay this worldwide tax in the country where the goods and / or services are sold. However, UK Finance Minister Rishi Sunak wishes ” an exemption on financial services In order to avoid too strong an impact on the banks present in the City of London.

Towards an exemption for financial services companies

The official who confided to the Financial Times the British project believes that Rishi Sunak is not the only one pushing for this exemption of financial services companies. Our position is that we want financial services companies exempt and EU countries are in the same position “, he explains.

If the Europeans seem to agree, they will still have to convince Joe Biden, who supports a wider field of this global taxation so that it affects all sectors. However, the international tax reform project presented in October 2020 by the OECD provided for the exclusion of banks and financial services companies from this tax. This exemption was then removed in April 2021 by the United States. If a general agreement has been found, the members of the G7 will still have to negotiate on the ins and outs of this extraordinary reform.