Amazon and Facebook to fall under new G7 tax rules

Facebook said it welcomed the progress made by the Group of Seven on a minimum tax rate and accepts this could mean the social network pays more tax, and in different places.

FILE PHOTO: The entrance sign to Facebook headquarters is seen in Menlo Park, California, on Wednesday, October 10, 2018. REUTERS/Elijah Nouvelage/File Photo (REUTERS)

Both Amazon and Facebook will fall under new proposals for a global minimum corporation tax agreed by the Group of Seven on Saturday, United States Treasury Secretary Janet Yellen said.

Asked whether the two companies would be covered by the proposal, Yellen said: "It will include large profitable firms and those firms, I believe, will qualify by almost any definition."

The joint statement by G7 finance ministers earlier on Saturday said it would tackle tax avoidance by "the largest and most profitable multinational enterprises".

Amazon has lower profit margins than most other tech companies, and European countries had been concerned it would escape extra taxation under initial U.S. proposals to the G7.

Facebook says it could pay more tax after G7 deal

Facebook welcomes the progress made by the Group of Seven on a minimum tax rate and accepts this could mean the social network pays more tax, and in different places, its head of global affairs Nick Clegg said on Saturday.

"Facebook has long called for reform of the global tax rules and we welcome the important progress made at the G7," Clegg said on Twitter. "Today's agreement is a significant first step towards certainty for businesses and strengthening public confidence in the global tax system.

"We want the international tax reform process to succeed and recognize this could mean Facebook paying more tax, and in different places."

With inputs from Reuters