The G7 finance ministers and central bank governors agreed that large tech companies such as Google, Amazon, Facebook or Apple can be taxed in the countries in which they make money, even without being physically present there.
They also agreed that there should be a minimum level of tax to discourage countries from competing in a “race to the bottom” to attract business from digital multinationals.
Bruno Le Maire, French Finance Minister: “Members of the G7 have agreed for a minimum taxation on private companies. They reiterated their determination to put an end to the aggressive fiscal competition among states, to put an end to fiscal dumping, to put an end to aggressive optimisation by certain companies that find several ways to avoid tax.”
G7 also agreed that digital currencies such as Facebook’s planned Libra raise serious concerns and must be regulated as tightly as possible to ensure they do not upset the world’s financial system.
Bundesbank President and member of the ECB Governing Council, Jens Weidmann: “Today was a start towards an internationally agreed regulation of stablecoins. It’s not about thoughtlessly repressing innovative concepts – we are open to technology developments and stablecoins offer opportunities for economic prosperity. So there is no reason to be alarmed but there is reason to be vigilant.”
Governments are starting to worry that big tech companies are encroaching on areas that belong to governments, such as issuing currency.