G7 nations strike deal to tax big companies and squeeze havens

G7 nations strike deal to tax big companies and squeeze havens
In a move that could raise hundreds of billions of dollars to help govts cope with the aftermath of COVID-19, the G7 nations agreed to back a minimum global corporate tax rate of at least 15%. (AFP)
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Updated 06 June 2021

G7 nations strike deal to tax big companies and squeeze havens

G7 nations strike deal to tax big companies and squeeze havens
  • Amazon and Google welcome the agreement, Facebook says it will likely pay more tax

LONDON: The United States, Britain and other leading nations reached a landmark deal on Saturday to pursue higher global taxation on multinational businesses such as Google, Facebook, Apple and Amazon.

In a move that could raise hundreds of billions of dollars to help governments cope with the aftermath of COVID-19, the Group of Seven (G7) large advanced economies agreed to back a minimum global corporate tax rate of at least 15 percent. Companies will also have to pay more tax in the countries where they make sales.

“G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age,” British finance minister Rishi Sunak said after chairing a two-day meeting in London.

The meeting, hosted at an ornate 19th-century mansion near Buckingham Palace in central London, was the first time finance ministers have met face-to-face since the start of the pandemic.

US Treasury Secretary Janet Yellen said the “significant, unprecedented commitment” would end what she called a race to the bottom on global taxation.

German Finance Minister Olaf Scholz said the deal was “bad news for tax havens around the world,” adding: “Companies will no longer be in a position to dodge their tax obligations by booking their profits in the lowest-tax countries.”

Rich nations have struggled for years to agree a way to raise more revenue from large multinationals, which can pay little tax on the billions of dollars of sales they make in countries around the world, draining public finances.

US President Joe Biden’s administration gave the stalled talks fresh impetus, however, by proposing a minimum global corporation tax rate of 15 percent to deter companies from booking profits elsewhere.

The 15 percent is above the level in countries such as Ireland but below the lowest level in the G7. Amazon and Google welcomed the agreement and Facebook said it would likely pay more tax.

Nick Clegg, Facebook’s vice president for global affairs and a former British deputy prime minister, said: “We want the international tax reform process to succeed and recognize this could mean Facebook paying more tax, and in different places.”

But some campaign groups condemned what they saw as a lack of ambition.

Broader support

The deal, years in the making, also promises to end national digital services taxes levied by Britain and other European countries which the US said unfairly targeted US technology giants.

But the measures will first need to find broader support at a meeting of the G20 — which includes a number of emerging economies — due to take place next month in Venice. “It’s complicated and this is a first step,” Sunak said.

Exactly which big companies will be covered, and how governments divide up tax revenue, is still to be agreed. Germany, France and Italy welcomed the tax agreement, although French Finance Minister Bruno Le Maire said he would fight for a higher global minimum corporate tax rate than 15 percent, which he described as a “starting point.”

Campaign groups such as international development charity Oxfam also said the minimum tax rate should be much higher. “They are setting the bar so low that companies can just step over it,” Oxfam’s head of inequality policy, Max Lawson, said.

But Irish Finance Minister Paschal Donohoe, whose country is potentially affected because of its 12.5 percent tax rate, said any global deal also needed to take account of smaller nations.

Sunak said the deal was a “huge prize” for taxpayers, but it was too soon to know how much money it would raise for Britain.

The agreement does not make clear exactly which businesses will be covered by the rules, referring only to “the largest and most profitable multinational enterprises.”

Some European countries have feared that a business such as Amazon could slip through the net as it reports lower profit margins than most other well-known technology companies.

Ministers also agreed to move toward making companies declare their environmental impact in a more standard way so investors can decided more easily whether to fund them, a key goal for Britain.

The G7 includes the US, Japan, Germany, Britain, France, Italy and Canada.


Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast
Updated 20 January 2022

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

RIYADH: Riyadh-based Saudi Basic Industries, also known as SABIC, one of the leading petrochemical firms worldwide, announced the start of operations of its petrochemical joint venture with US ExxonMobil.

US Texas is to witness the launch of an ethylene production unit – operating an annual capacity of around 1.8 million tons, the homegrown petrochemical company said in a statement.

The new production unit, which started construction in 2019, will produce materials to be utilized in packaging, agricultural film, construction materials, clothing, and automotive coolants.

This project is in line with SABIC’s strategy, aimed at diversifying its feedstock as well as strengthening its position in North America.

“This is a remarkable achievement that positions us well to help meet growing global demand for performance products while providing meaningful investment in the US Gulf Coast,’ president of ExxonMobil Karen McKee said, commenting on the partnership.

SABIC noted that the deal’s financial impact is expected to roll out on the company’s financial statements during the ongoing quarter.

In the latest trading session, shares of the company edged down by 0.2 percent to close at SR126 ($33.6).


Mastercard, Coinbase partner to make NFTs more accessible

Mastercard, Coinbase partner to make NFTs more accessible
Updated 20 January 2022

Mastercard, Coinbase partner to make NFTs more accessible

Mastercard, Coinbase partner to make NFTs more accessible

RIYADH: Payments giant Mastercard has partnered with cryptocurrency exchange Coinbase to make non-fungible tokens more accessible.

Mastercards can be used to make purchases on Coinbase’s upcoming NFT marketplace.

“We’re excited to announce today that we’re partnering with Coinbase to let people use their Mastercard cards to make purchases on Coinbase’s upcoming NFT marketplace,” Mastercard said in a statement.

“Getting more people involved safely and securely is perhaps the best way to help the NFT market thrive.”

Mastercard also sees greater potential for core NFT technology to go beyond art and collectibles in many other areas.

Coinbase announced in October last year that it is launching an NFT marketplace.

“Coinbase NFT, as a peer-to-peer marketplace that will make minting, purchasing, showcasing and discovering NFTs easier than ever,” Coinbase said.

“We’re making NFTs more accessible by building user-friendly interfaces that put the complexity behind the scenes. We’re adding social features that open new avenues for conversation and discovery. And we’re going to grow the creator community exponentially, a win for artists and for fans.” 


Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO
Updated 20 January 2022

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

RIYADH: Saudi food firm Wafrah for Industry and Developments has appointed Khaled Saleh Al Amoudi as CEO on Thursday, according to a bourse statement. 

The decision follows recommendation from the Remuneration and Nomination Committee.

With a M.Sc.in Financial Management, Al Amoudi currently holds the chief financial officer position at the firm, with more than 20 years of accumulated experience as CFO and in the governmental and bank sectors.


Tadawul approves $755m government debt listing

Tadawul approves $755m government debt listing
Updated 20 January 2022

Tadawul approves $755m government debt listing

Tadawul approves $755m government debt listing

RIYADH: Saudi stock exchange Tadawul approved listing of SR2.83 billion ($755 million) worth of government debt instruments, submitted by the Ministry of Finance, according to a bourse filing.

The first issuance dated January 8, amounts to SR1.25 billion, Tadawul said in a statement.

The second issuance dated January 12, is valued at SR1.59 billion.


Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales
Updated 20 January 2022

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

RIYADH: Saudia Dairy and Foodstuff Co., or SADAFCO, reported a 28.6 percent decline in profit during the nine months ending Dec. 31, 2021. 

Profits dropped to SR146 million ($38.9million), compared to SR205 million in the corresponding period a year earlier, the company announced in a bourse statement.

SADAFCO attributed the lower profit figures to lower sales volumes driven by the pandemic, an increase from 5 percent to 15 percent in VAT, and higher material and logistics costs.

The financial statements of the company indicated a healthy cash flow, with a strong cash position of SR679 million.

SADACFO’s share price edged down by 0.12 percent in today’s session to close at SR167.

Earlier, the company’s board recommended cash dividends at SR3 per share for the first half of the fiscal year ended Mar. 31, 2022.

Jeddah-based SADAFCO operates sales and distribution depots in 24 locations across Saudi Arabia, Bahrain, Qatar, Jordan, and Kuwait. Its products are also exported to several countries in the MENA region.