As the US counterpart backs down in key discussions, Rishi Sunak scores a global tax gain for the UK.
Rishi Sunak secures a global tax gain for the UK as his US counterpart backs down in key conversations.
RISHI SUNAK is poised to gain a massive post-Brexit international tax increase for the UK following tense showdown discussions with both the US and the EU.
The Chancellor is poised to gain an exemption for the finance sector from new international taxes standards. This would be a significant victory for the City of London, as it would mean that some of the world’s largest banks would not have to pay as much tax on their profits in other countries. According to the Financial Times, which quoted people involved with the talks, the OECD has accepted Britain’s position that the financial services industry, which has been largely neglected in Brexit trade talks with the EU, be cut out of the proposed new global tax system.
However, according to these sources, Mr Sunak’s negotiation over the provisions of the new corporate taxation may have lost him money.
They claimed that in order to get rid of the UK’s digital services tax, which targeted high-profile American IT firms, the Chancellor had to make concessions to the US.
The most recent progress came at the Organization for Economic Cooperation and Development (OECDfirst )’s round of global tax talks, which has been debating where the world’s largest multinational firms will have to pay tax in the future.
During the initial phase of talks, known as “pillar one,” the UK and France pushed aggressively to guarantee that the largest firms pay more tax in countries where they operate but are not necessarily located.
The US backed down, saying it would focus on taxing multinational firms more severely based on where they operate if other countries did more to abolish digital taxes.
When the US demanded that “pillar one” tax regulations apply to all industries, including financial services, the UK was taken aback.
The next round of discussions will aim to get an agreement on a global minimum corporation tax rate of at least 15% in order to discourage corporations from moving profits to low-tax jurisdictions.
The Financial Times quoted a source close to the talks as saying, “This was a pure game between the US, the UK, and France.”
Financial services were supposed to be immune from the newly agreed worldwide tax legislation, according to the UK.
This is owing to regulations that require banks to be capitalized individually in each area in which they operate. “Brinkwire News in Condensed Form.”