G-20 countries eye tax policy for Internet giants: Nikkei, Latest Business News - The New Paper

G-20 countries eye tax policy for Internet giants: Nikkei

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TOKYO : G-20 countries are planning a new tax policy for digital giants, based on the business a company does in a country, not where it is based, the Nikkei business daily said yesterday.

The basic policy is likely to be signed by finance ministers from Group of 20 countries when they meet next month in the Japanese city of Fukuoka, the Nikkei said.

The policy, targeting companies like Google, Apple, Facebook and Amazon, would "allocate revenue to countries that provide large user bases for the world's digital corporate giants", the daily said, citing sources.

The countries will seek to reach a final agreement in 2020, but how the policy will work remains to be finalised.

One possibility would be to distribute tax revenues to countries based on the number of users a given company has in each country.

That could mean Facebook, which has centralised its profits and tax payments in Ireland to take advantage of low rates, would see its tax payments redistributed to areas where more users live.

But details of how the tax will be collected and distributed and which companies will be affected remain to be finalised, with the Organisation for Economic Cooperation and Development (OECD) expected to help iron out the rules.

The OECD is trying to forge a global agreement that would prevent companies from simply declaring their income in low-tax areas, depriving other countries of billions in revenue. - AFP