The founder of Facebook, Inc. (Facebook), Mark Zuckerberg welcomes new global tax reforms despite the new regime is likely to impose more taxes. The global cross-border tax rules are set to be re-drafted after as much as 137 nations wanted to avoid a new trade war over the global multiplication of taxes on digital services last month. Meanwhile, some nations oppose the global trade regime and declared to work alone without respecting the new tax rules.
The CEO of Facebook, Zuckerberg hinted that he would accept the global tax reforms although it might impose to pay more taxes in different countries. Ahead of Saturday’s conference in Germany, Zuckerberg explained in an excerpt of his statements, “I understand that there’s frustration about how tech companies are taxed in Europe. We also want tax reform and I’m glad the Organization for Economic Co-operation and Development (OECD) is looking at this,”
Citing the needs of the powerful organization and its supervision of the new trade regime, he added, “We want the OECD process to succeed so that we have a stable and reliable system going forward. And we accept that may mean we have to pay more tax and pay it in different places under a new framework.”
An official of the OECD told Reuters, government officials and representatives have agreed to negotiate new rules for the global digital tax of the companies and taxes should be levied on based on the shares of the profits earned by the companies.
However, it still remains an unfinished policy as a few of the leading economic powers oppose it alleging a discriminatory policy. Meanwhile, tech giants including Amazon.com Inc. (Amazon), Facebook, and Google LLC (Google) were the main companies that extracted advantages from the existing rules as they could generate profits in low tax countries like Ireland.
Facebook’s Head Meeting EU’s Leaders
Although Zuckerberg had not disclosed details on tax rates, he claimed that Facebook maintained a regular payment of all the tax and announced to pay if this new regime has an averaged tax more than 20% over the last five years. A media reported, Facebook paid around 28.5 million pounds ($37.2 million) in corporation tax in 2018 in Britain although the tech company had a sales record of 1.65 billion pounds in the UK.
As the global regulators set to move the new trade reforms of digital taxes by early July 2020, Zuckerberg would meet the EU’s digital and industry representatives on Monday during his visit to Europe. As Reuters claimed, the global deal for digital tax is expected to finalize before the end of 2020.
During his visit to Europe, Zuckerberg would talk to the European Competition and Digital Commissioner, Margrethe Vestager and Internal Market Commissioner, Thierry Breton who announced the creation of a single European data market within the coming few days. The European regulators have been targeting especially the American tech giants such as Facebook, Google, and Amazon.
Meanwhile, a handful of countries have started preparing national digital taxes in the absence of global rules. Washington also announced to impose retaliatory trade tariffs because it believed that such new tax regimes were discriminatory against big American tech giants.
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