G20 to move ahead with plans for digital tax on world’s tech giants

<em>Finance ministers from G20 countries (pictured) will take a keen interest in plans for a digital tax. </em>

The G20 is pushing ahead with plans to close international loopholes used by tech giants to lower their tax bills. In a draft communique obtained by Reuters, the group said that it endorses the “ambitious” two-pillar approach to a so-called digital tax, and that it will “redouble [its] efforts for a consensus-based solution with a final report by 2020.”

The first of these two pillars is that countries are expected to tax companies based on where their goods and services are sold rather than where the company is based. The second is that they will enforce a global minimum tax rate so that even if a company shifts its sales to a country with lower taxes, such as Luxembourg, the benefits will be limited.

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