Rishi Sunak: We need a tax system fit for a digital age

EU: Expert discusses Brussels new tax system

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And he said it was clear that taxation had to change in a “complex global digital economy”. Rich nations have struggled to agree on a way to raise more tax from large multinational companies such as Google, Facebook and Amazon. “We cannot continue to rely on a tax system that was largely designed in the 1920s,” Mr Sunak said as he opened the meeting in London.

“And I will just say this – the world has noticed. And I believe they have high expectations for what we all can agree over the coming days.”

Finance ministers including Janet Yellen from the US and contemporaries from Japan, France, Canada, Germany and Italy attended the summit at Lancaster House.

But the bigger challenge remains reaching an agreement on tax reform which could then be presented to a broader group of countries, the G20, at a summit in Venice in July.

In a joint letter on Friday, finance ministers from Germany, France, Spain and Italy wrote that they would “commit to defining a common position on a new international tax system in London”.

The US Treasury expects a fuller agreement to come when Joe Biden and other heads of government meet at the G7 in Cornwall on June 11.

The US has proposed a minimum global corporate tax rate of at least 15 percent on the world’s 100 largest and most profitable companies.

Britain, Germany and France are open to this but want to ensure companies such as Amazon – which has lower profit margins than other tech firms – does not escape the net.

But just as important for Britain and many other countries is that companies pay more tax where they make their sales – not just where they book profits, or locate their headquarters.

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