Wednesday 9 October 2019 11:51 am

OECD targets tech giants as it shakes up global tax rules

Multinational tech giants will face a crackdown on their corporate tax bills under new rules outlined by the Organisation for Economic Cooperation and Development (OECD).

Tech titans such as Google, Facebook and Amazon have been accused of dodging taxes by booking their profit in low-tax countries such as Ireland, despite serving customers across the world.

Read more: Netflix gets €57,000 tax rebate in the UK as binge-watching boosts profit

Earlier this year more than 130 countries agreed to overhaul tax rules written up almost a century ago, and tasked the OECD to lay out new proposals.


The new rules would enable governments to levy more tax on cross-border companies relating to the income from sales in their countries.

“The current system is under stress and will not survive if we don’t remove the tensions,” Pascal Saint-Amans, OECD head of tax policy, told reporters.

The Paris-based organisation hopes its new proposals will stop countries from rolling out their own individual taxes in the absence of global reform.

Both France and the UK have already laid out plans for a digital services tax, in moves that risk sparking anger in the US.

The OECD’s measures would be a huge boost for countries with large consumer markets, but would take their toll on low-tax countries such as Ireland as well as offshore tax havens.

As part of the plan, the organisation has outlined its scope for which companies would be impacted, how much business they must do in a country to be taxable there, and how much their profit can be taxed.

The companies affected must be multinational firms with revenue of over €750m (£674m), the OECD has suggested.


While the rules are primarily aimed at tech giants, they may also impact large consumer firms that sell retail products through a consumer network.

Read more: Margrethe Vestager stays on as EU competition head in blow for tech giants

Finance ministers are expected to discuss the proposals initially at the G20 summit in Washington next week.

The OECD will then seek to have an agreement reached by the end of January.

Main image credit: Getty

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