Big Tech reacts to G7 minimum tax rate deal: 'Significant first step'
Yellen says Amazon, Facebook 'qualify by almost any definition' for proposed international minimum tax rate
Big Tech may face some of the most significant impact of a proposed 15% minimum corporate tax rate that finance ministers for the G7 nations meeting in London supported Saturday.
Treasury Secretary Janet Yellen told reporters that companies that fall under the G7 deal "will include large, profitable firms," such as Amazon and Facebook.
"And those firms, I believe, will qualify by almost any definition," she added.
Still, large tech companies expressed support for an international deal.
Nick Clegg, Facebook’s vice president of global affairs, claimed on Twitter that the company "has long called for reform of the global tax rules and we welcome the important progress made at the G7."
"We want the international tax reform process to succeed and recognize this could mean Facebook paying more tax, and in different places," he wrote.
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An Amazon spokesperson also called the agreement "a welcome step forward," telling FOX Business via email that the company supports a process led by the larger Organisation for Economic Co-operation and Development, a 38-nation economic group.
"We believe an OECD-led process that creates a multilateral solution will help bring stability to the international tax system," the Amazon spokesperson said.
OECD members include countries with lower tax rates like Ireland, which has lured hundreds of U.S. businesses with its 12.5% corporate rate, according to the American Chamber of Commerce Ireland. Those companies have invested $444 billion in Ireland alone, something the country likely won’t want to risk giving up by meeting the higher rate.
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A Google spokesperson also said the company "strongly" supports an update of international tax rules in a statement to Reuters.
"We hope countries continue to work together to ensure a balanced and durable agreement will be finalized soon," the representative told Reuters.
Other major tech businesses including Apple and Microsoft didn’t immediately respond to inquiries from FOX Business.
The Biden administration has supported the 15% international minimum. The U.S. rate is currently 21%, and the administration has expressed a desire to raise it to 28%. But any plan will still need the approval of Congress, which has so far eluded the administration due to Republican opposition.
Yellen said on Saturday that the agreement could help "end the existing harmful dynamic" of countries competing to attract businesses by offering increasingly-lower tax rates.
"That global minimum tac would end the race-to-the-bottom in corporate taxation and ensure fairness for the middle class and working people in the U.S. and around the world," she said.
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She added, "The global minimum tax would also help the economy thrive, by leveling the playing field for businesses and encouraging countries to compete on positive bases, such as education and training our work forces and investing in research and development and infrastructure."
The G7 countries are the U.S., Canada, France, Germany, Italy, Japan and the United Kingdom.
FOX Business' Jonathan Garber and Reuters contributed to this report.