On Saturday, the 8th of June 2019, at a two-day meeting of G20 finance ministers at the city of Fukoka in Japan, the perspicacious bunch of 20 finance ministers had reached an accord to prepare common rules aimed at closing tax loopholes used by tech tycoons likes of Facebook & Google to evade their corporate taxes, a copy of the bloc’s draft statement seen by a press agency had unveiled on Saturday (June 8th).
Despite intense criticisms, for years tech tycoons such as Facebook, Google, Amazon alongside other larger internet service providers had been evading their taxes by showing profit on low-tax countries, no matter who the end customer had been.
Besides, many alongside G20 nations had been considering these practices unfair. If enacted, the new rule would add higher taxes for larger multinational internet service provider, however, it would also make it life difficult for countries like Ireland, which had been attracting foreign direct investments with the promise of ultra-low corporate taxes for years.
Adding that a final solution would be reached by 2020, the draft statement said, “We welcome the recent progress on addressing the tax challenges arising from digitization and endorse the ambitious program that consists of a two-pillar approach.
We will redouble our efforts for a consensus-based solution with a final report by 2020”. None the less, UK and France had been amongst the most prominent voices to yield a higher corporate tax on internet service providers.