Facts, numbers, comments, nodes and criticisms on the minimum tax of 15% for the tech giants
After years of discussions, false starts and veiled threats, last weekend the finance ministers of the G7 countries, meeting in London, reached an agreement to establish a global tax of at least 15% for multinationals.
A percentage that appeals to the tech giants, including Google and Facebook, but which is unlikely to find favor in those countries where a facilitated tax policy is in force.
This is a “scandalous” agreement, according to French economist Thomas Piketty.
Here are facts, numbers, comments and reactions. THE AGREEMENT
Let’s start with the facts. Finance ministers from the G7 countries – the United States, United Kingdom, France, Germany, Canada, Italy and Japan – have reached an agreement to establish a minimum tax, of 15%, for all companies with profit margins above 10 percent. For the most profitable companies, 20% of the profits exceeding 10%. G20 APPROVAL NEEDED
Understanding is only a first step. After the G7, the proposal must be approved first by the OECD and then by the G20, which will meet in Venice from 8 to 11 July. In the US, the tax will have to get the go-ahead of both classrooms, and in the Senate the Democrats have only one vote of advantage. THE REPLACEMENT OF THE DIGITAL-TAX
The 15% tax, in Italy, will replace the Digital-Tax, which consists of a rate of 3% on the amount of taxable revenues earned during the calendar year. DRAGHI: A HISTORICAL AGREEMENT
For Prime Minister Mario Draghi, the agreement represents a “historic step”, while Economy Minister Daniele Franco is convinced that in Venice “an agreement will also be found at the G20 level”, but that it will be necessary “A few years” for the implementation of the standard. AMAZON CELEBRATES
The 15% rate was also welcomed by Big tech. “I am happy with what was decided by the G7 finance ministers because putting random taxes is wrong and generates double taxation phenomena; We have been saying for years that a solution for global companies must be a global solution and the one who has decided tries to standardize taxation. This concept of multilateralism goes in the right direction ”, commented today Mariangela Marseglia, Country manager Italy and Spain Amazon, on the occasion of the panel ‘Sustainable innovation for a new Renaissance’ of the first edition of the Forum in Masseria. FACEBOOK WISHES THE AGREEMENT TO BE SUCCESSFUL
Facebook also celebrates the agreement. “We want international tax reform to be successful, and we recognize that it could mean a higher tax burden for Facebook, and in several countries,” said Nick Clegg, Facebook’s vice president of global affairs. GOOGLE: BALANCED AGREEMENT
It is an agreement, the one on the minimum tax, which is “balanced and lasting”, claims Google, according to Sky News. WHAT CHANGES FOR GOOGLE, FACEBOOK AND MORE
On the other hand, little will change in the balance sheets of the internet giants, which see their revenues increase year on year. “On average, Google and C. increase their turnover by an average of 20% per year. An unstoppable triumphal ride. Microsoft, for example, in 2020 had a turnover of 143 billion, it was only 46 in 2017. Facebook has doubled its turnover from 40 billion three years ago to 86 now. Amazon today has sales of 386 billion against only 177 billion in 2017 “, explained Fabio Pavesi, a journalist expert in finance, on Dagospia .:” Google (now Alphabet) has added another 70 billion in new revenues to the 110 it produced only in 2017 “. HOW THE CASH OF THE TECH COLOSSUS GROWS
According to a recent report by the Mediobanca Research Department, “the liquidity in the financial statements of the top 25 tech companies globally has risen to 589 billion dollars; 70 billion more than in 2019 in the pre-Covid era. Microsoft alone has 120 billion of cash in its belly; Google exceeds 100 billion; Amazon over 60 billion dollars ”, Pavesi writes. And in the same report, it is recalled that facilitated taxation has allowed companies to save “46 billion in taxes otherwise due. They make 9 billion a year spread over all the protagonists “. HOW MUCH WOULD YOU GET TO ITALY WITH THE MINIMUM TAX
The introduction of a 15% tax would bring Italy 2.7 billion in fresh money, according to the calculations of the European Tax Observatory, the body launched by the commission about a year ago. This would be a very small part of those 48.3 billion euros that Europe should be able to raise. In the United States, the bill would stand at 40.7. NOT ONLY BIG TECH
Of course, the issue is not just about Big Tech. The minimum taxation would also involve giants such as Eni and Enel, the European Observatory points out. The first work in 72 countries, in 2019 paid just over 4.73 billion in taxes and should add about 171.5 million due to the minimum tax; the second should put on the plate, instead, another 356.3 million (out of taxes paid by 1.91 billion, for the activities carried out in 15 countries).
The banking sector is also affected, with a maxi tax due to Intesa Sanpaolo (672 million, 41% of its current tax burden). Unicredit should add 293 million to the current 901. THE BIG PHARMA SECTOR
And then there is the Big Pharma sector, which has a global turnover of just over $ 1,300 billion annually. Pfizer “which will enjoy the sales of its anti Covid vaccine and is expected to exceed 20 billion in net profits out of 72 billion in revenues in 2021. Merck made net profits of 7 billion out of 48 in turnover in 2020. Glaxo produced 5.7 billion net profits on 34 billion turnover ”, remembers Pavesi in Dagospia. PIKETTY’S CRITICISM
A deal on a 15% tax is “scandalous”, according to French economist Thomas Piketty.
“Giving large multinationals the privilege of paying 15% tax means recognizing them the right to pay less than small and medium-sized enterprises, like most people and the middle class in general,” he argues. Piketty. “To the United States’ proposal for a 21% tax rate, the EU countries have responded by hiding behind the excuse of having to put everyone in agreement, already knowing that there was no unanimity. A way to say no to a slightly more courageous proposal than the agreement signed now in Europe ”. CUSTOMERS WILL PAY THE TAX
For Eugene Fama, Nobel laureate in Economics, there are two problems of the agreement: “The first is legal. The president of the United States, as I believe the leaders of many other countries involved, does not have the authority to enforce such an agreement. He has to go to Congress, and I’m not sure he’ll be that easy to find a majority for approval, ”explains Fama.
“The second is cheap. This tax will not be paid by companies, because as always they will pass it on to customers. So the details of the implementation are fundamental, to understand if it can have positive effects on growth, or if it risks becoming a depressive measure ”. THERE IS A RISK OF DEPRESSING THE ECONOMY
For Fama, an agreement like this risks depressing the economy. “It would be necessary to review the whole system, so that everyone can know in advance the taxes to which they will be subjected. Above all, it would be useful for the same dollars not to be subject to multiple withdrawals ”, explains Fama.
“If you raise taxes it’s likely,” the economy is depressed. “But companies don’t pay them anyway, they pass them on to consumers by increasing prices”. WHO OPPOSES THE MINIMUM TAX
Among the obstacles to be overcome are the countries with subsidized taxation. “To oppose the rule are above all those countries which, such as Ireland, Hungary or Cyprus, use a tax advantage to attract multinationals”, writes Repubblica, recalling that the approval procedure is long and that in the USA the republican and skeptical opposition.

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