Nick Clegg, Facebook’s vice president for global affairs, said today the social media giant welcomes the corporate tax agreement that 140 countries around the world agreed this week.
“We are pleased to see an emerging international consensus,” Clegg said in a statement sent to City A.M. this afternoon.
Under the agreement, countries would enact a global minimum corporate tax of 15 per cent on the biggest internationally active companies, meaning Facebook, Amazon and a range of other multinationals will pay significantly more tax than they currently do while operating out of low tax jurisdictions such as Ireland or Luxembourg.
Clegg, a former Lib Dem MP and deputy prime minister in David Cameron’s coalition government, added that “Facebook has long called for reform of the global tax rules, and we recognise this could mean paying more tax, and in different places.”
He said that “the tax system needs to command public confidence, while giving certainty and stability to businesses.”
The international community is moving towards sweeping changes to how big multinational companies are taxed to prevent them from stashing profits in offshore havens where they pay little or no tax after 140 countries have agreed to sign the deal.
US President Joe Biden has been one of the driving forces behind the agreement as governments around the world seek to boost revenue following the Covid-19 pandemic.
US Treasury secretary Janet Yellen hailed the deal as “a once-in-a-generation accomplishment for economic diplomacy.”
The agreement was announced by the Paris-based Organisation for Co-operation and Economic Development, which hosted the talks that led to it.
The deal is an attempt to address the way globalisation and digitalisation have changed the world economy.
It would allow countries to tax part of the earnings of companies whose activities, such as online retailing or web advertising, do not involve a physical presence.