The US has agreed to drop the threat of trade tariffs against five European countries over their digital service taxes on big tech groups such as Amazon and Facebook, in a move designed to make it easier for countries to implement a groundbreaking deal to reform global corporate taxes.
More than 130 countries this month signed up to the biggest corporate tax overhaul for more than a century, orchestrated by the OECD. It included a 15 per cent global minimum effective corporate tax rate, as well as new rules to force the world’s multinationals to declare profits and pay more in the countries where they do business.
The UK, France, Italy, Spain and Austria — which have all introduced taxes designed to target revenue from large US tech firms in recent years — agreed on Thursday to give multinationals affected by the changes a credit that can be used against future tax bills.