Financial Services Exemption in the UK The new global rules on taxation of multinational corporations aim to prevent the largest banks in the City of London from paying more taxes on profits in other countries.
The Paris-based OECD talks, slated to end Thursday, have accepted a British lawsuit that carving out the financial services industry. Proposed new global tax systemAccording to the two informed of the negotiations.
But British Prime Minister Rishi Sunak’s victory over the details of the new corporate tax is expensive, these people said. He had to make concessions to the US by getting rid of the UK digital services tax, which focused on American tech companies.
The spin-off of financial services took place in the first part of global tax negotiations in OECD clubs in wealthy countries to determine where the largest multinationals would have to pay taxes in the future.
The second part of the negotiations focuses on agreeing a minimum global corporate tax rate of at least 15 percent to prevent companies from transferring profits to low-tax countries.
Described as the first pillar of the first part of the negotiations, the UK and France are more likely to be in countries where the largest companies, especially the US tech group, do business, but not always where they are. We ask you to guarantee payment of the tax.
The United States has agreed to focus on taxing multinational corporations while other countries have promised to abolish digital taxes, but will apply the first tax law to all sectors, including financial services. It shocked the UK by saying it had to be done.
“It was a pure game between the US, UK and France,” said one of the negotiations.
Britain believed that financial services would be removed from the new global tax law. Regulations require banks in all jurisdictions in which they do business to be individually capitalized, declare profits and pay taxes in the country in which they do business.
Without the exemption, HM Treasury risked lowering taxes paid to city banks and increasing taxes paid to other countries.
A person briefed on the OECD talks said the United States wanted to ensure the UK fleshed out the early abolition of digital services taxes, but the timing of the abolition was “carefully choreographed.”
The United States initially wanted Britain, France, Italy and other countries with digital taxes to abolish them as soon as new global tax laws were agreed, but this met with strong opposition from London and Paris. I faced it.
“It’s a bit like giving a car key before you get the money,” said one of the snack allies.
However, UK officials say countries with digital taxes need a phased process to take steps to get rid of them while moving the United States to adopt a new global tax system. I realized it.
The takeaway ally said: They will, but everything has to be seen in the round. “
Financial Services Sector To Split From New Global Tax Regulations Source link Financial Services Sector To Split From New Global Tax Regulations