China says it will continue to work for ‘fairer’ global minimum tax rate that could force tech giants to pay more
- The plan is being driven by the G20 and OECD and could make it harder for the likes of Apple, Google and Facebook to avoid paying tax in their home countries
- The two-pillar scheme is designed to impose a global minimum of 15 per cent on corporations
Finance Minister Liu Kun said on Friday that the introduction of a global minimum corporate tax rate of 15 per cent would help to create a fair and sustainable international tax system.
“China is a big digital economy. We have always adhered to the spirit of multilateralism and an open and cooperative attitude,” Liu told a press conference. “We have actively participated in the consultation and design of the two-pillar solution, and we have made contributions.”
The so-called Base Erosion and Profit Shifting 2.0 scheme, contains two “pillars”, the first of which is aimed at making multinational companies – particularly American technology giants such as Google, Apple and Facebook – pay taxes to the countries where their customers and users are located rather than where the company had a physical presence.
Under pillar two, a minimum effective tax rate of 15 per cent will be applied to ensure multinationals pay at least some tax in their home countries.
