The Federal Government and the Labor-led Opposition have shown bipartisan support for an agreement between the G7 advanced economies to back a minimum global corporate tax rate of at least 15 percent that could force US tech giants to pay more tax.
Prime Minister Scott Morrison will discuss the tax deal with G7 leaders when he travels to the UK this week as a guest of the G7 Summit.
It’s unclear whether the Federal Government will consider adopting the minimum tax rate, as it is below the 30 percent currently charged – which is one of the highest corporate tax takes in the developed world.
A spokesman for Treasurer Josh Frydenberg welcomed the commitment from the G7 nations, saying that Australia will remain an “active and constructive” participant in the OECD-led discussions.
But G7 deal could upset the corporate tax apple-cart, if it is adopted here with Australian companies certain to call for them to be lowered.
Facebook paid just A$20 million tax on half a billion dollars revenue garnered through its Australian operations last year. Google paid just five percent tax on its $1.1 billion Australian revenue amounting to just over $51 million.
The G7 meeting in London agreed to back a minimum global corporate tax of 15 percent and to battle tax avoidance by making companies pay more in the countries where they do business.
Tech giants Amazon and Facebook are among those likely to be affected.
Both Google and Facebook have declared guarded support for the deal which will reallocate taxing rights for large, profitable multinational companies.
The agreement could see billions of dollars flow to G7 governments, in order to pay off debts incurred during the Covid crisis.
Ireland has put a dampener on the London meeting, reminding those celebrating the agreement that there are 139 countries at the table that still have to ratify it.
