Recently, Biden reached an epoch-making agreement with European finance ministers at the G7 summit. They will impose a minimum fee on multinational companies. 15%corporate tax. The first to bear the brunt are the large global companies with an average annual profit of more than 750 million euros, such as Amazon, Google, Apple and Microsoft and other US-led Internet giants. In addition, G7 has also announced that it wants to talk to China, and then promote it to the world.
For China, if this agreement is followed up, it will cause some problems for some of the current Internet giants in China. Impact, but from the perspective of overall interests, the advantages outweigh the disadvantages. In addition to the immediate benefits, the strategic perspective is not optimistic. We will be relatively passive.
Some countries with relatively backward Internet technology have set very low tax rates. Starting from the strategy of attracting investment, China has also implemented a similar policy. If the agreement is implemented, then multinational companies will pay more money to low-tax countries, and more money to pay taxes and fees to China.
Although we have profited economically, in international politics, such follow-upwe will be relatively passive. Because, after all, this agreement was proposed by Europe and the United States. They will have more voice and China will be dragged by the West.
The biggest beneficiaries of this agreement are Europe and the United States. Will Europe rebuild with the United States?
Previously, European countries did not have strong digital companies on their own, and faced with the domestic market being seized by foreign companies, they imposed very stringent charges on American multinational companies. The digital service tax makes tax-paying companies dumb to eat Coptis chinensis. The U.S. government is not easy to directly intervene with policies, for fear that the EU will get closer to China as a result. This time the United States has set a 15%minimum tax rate in exchange for exempting Europe from the digital service tax. This is a compromise between the two parties.
European countries led by Britain, Germany, France, and Italy do not trust the Biden government, saying that they will collect taxes as usual before the agreement is actually implemented . The EU also investigated Facebook on the grounds of violation of fair competition. The European Union is like a mosquito in autumn, catching the big multinational companies and sucking blood. On the one hand, it is for money, and on the other hand, it is to prick the United States everywhere so that the United States will not care about European affairs.
The United States is willing to compromise because the government has not actually received the money from these multinational companies. The fiscal deficit is getting bigger and bigger, and the people don’t have a lot of livelihood. The White House hopes that through this”blood supplement”, the infrastructure plan will be implemented, giving the American people an explanation, and letting the richest 1%of capitalists give some blood. The capitalists are also afraid of causing trouble and spending money. Therefore, companies such as Tesla have tweeted to support this agreement.
How does China respond to the western minimum tax rate and digital service tax
this The agreement is a double-edged sword for us in China. G7 hopes that this agreement can be extended to the world, but other small countries may not agree to the agreement because they have lost the benefits of tax incentives, but such opposition is minimal and has no real effect.
I think China can walk on two legs at present. First of all, adopt an open attitude towards this agreement, but whether to follow up or not must be negotiated in a friendly atmosphere to resolve the issue of whether to join. In addition, with regard to specific clauses, there must be the power to amend the terms, instead of “one size fits all”, and fully respect the different national conditions and political systems of various countries.
The United States and Europe feel good about themselves. They want to promote this agreement to the world without asking China’s opinion. This is a sign of arrogance. I believe that China only needs to plan calmly and seek common ground while reserving differences to solve this problem. On the eve of G7, China introduced a countermeasures bill to show Europe and the United States that it is best to listen to China before making a decision. If you are arrogant, be careful to capsize.