Global tax rates move closer

Global corporate tax deal edges closer after US backs minimum rateEuropean countries have backed US plans for a global minimum corporation tax, but UK and EU leaders have reiterated that the taxation of digital services would need to be linked for a deal to succeed. Meanwhile, the International Monetary Fund’s chief economist Gita Gopinath has stated that the organisation has long favoured adoption of a global minimum tax on corporate profits. Gopinath said on Tuesday that current disparities in national corporate tax rates had triggered "a large amount" of tax shifting and tax avoidance, reducing the tax base on which governments could collect revenues to fund needed economic and social spending. A UK Treasury spokesman said: “We support the OECD 's ongoing work to agree a global solution to the tax challenges of digitalisation of the economy.” But Eamonn Butler, director of the Adam Smith Institute, warned the plans would “represent the creation of a cartel designed to minimise competition and disadvantage consumers”.