China is not ready to agree to the introduction of a minimum tax rate of corporations, which lobbies the “big seven” countries, writes Bloomberg with reference to sources familiar with the negotiations on this issue.
China is not among the G7 countries that agreed to establish a minimum level of taxation, but is part of the so-called “big twenty”. The ministers of this group of states must meet in Venice next month, and it is assumed that they also have been reached by the prior arrangement on the tax matter.
Beijing’s position remains the main obstacle to the success of these negotiations, asserts the Bloomberg interlocutor, familiar with the course of the discussion. The country will require exceptions that will not allow to achieve an effective rate of 15 percent.
Most companies in China pays a 25% tax, but certain benefits for the high-tech sector assume a bid below 15 percent. Beijing wants to preserve these benefits that considers the country key to the economic development of the country. Now some of the high-tech companies give much less than 15 percent, and China “can offer to make exceptions for these sectors,” says Wang Zecezi (Wang ZECAI) from the Chinese Tax Academy – a research institution related to the Ministry of Finance of the country.
Beijing considers the high-tech sector of the economy important for its development plans for the next five years and tries to maintain growth rates Contrary to restrictions that are trying to impose US.
The Prime Minister of Hungary, Viktor Orban, already stated about his disagreement with the initiative G7. He believes that plans for the introduction of minimum corporate tax is absurd and lead to a reduction in investment in the EU countries.
Agreements on reform of taxation of large corporations Representatives of “Big Seven” reached in early June. In addition to introducing a minimum rate of 15 percent of profits, the initiative suggests that companies will affect their contribution to the formation of the budget of those countries where they sell.