U.S. tech giant shares unmoved on G7 tax deal

Reuters2021-06-07

LONDON (Reuters) -Shares in U.S. technology giants were flat to slightly lower in premarket trading, little changed by the landmark global minimum corporate tax deal agreed between the world’s richest nations.

The Group of Seven (G7) advanced economies agreed on Saturday to back a minimum global corporate tax rate of at least 15% and the focus now shifts to the G20 countries for a wider agreement on the new tax proposals.

Analysts say the tax deal wouldn’t be of major impact unless it’s agreed with tax-haven countries. The Irish economy for instance has been booming with the influx of billions of dollars in investment from multinationals due to lower taxes.

Shares of Facebook, Amazon.com, Apple, Microsoft and Google-parent Alphabet were all down between 0.4% and 0.7%. Europe’s tech stocks index was flat.

“The details of the implementation are still to be ironed out and potentially further watered down,” said Marija Vertimane, senior strategist at State Street Global Markets.

Dublin, which has resisted European Union attempts to harmonize its tax rules, is unlikely to accept a higher minimum rate without a fight.

“I would treat the current proposal as a small positive for the market,” Vertimane added pointing to levies being lower than what was initially discussed.

The G7’s proposals are seen targeting technology companies that sell services remotely and attribute much of their profits to intellectual properly held in low-tax jurisdictions.

“...the immediate market implications are likely to be minimal,” said Ian Williams, economics & strategy research analyst at Peel Hunt.

“No G7 nation currently charges that low a rate and the details, including agreement from numerous smaller countries, require plenty of work.”

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Comments

  • 120PL
    2021-06-07
    120PL
    Too big to fail, and too big to regulate 
  • Nonono96
    2021-06-07
    Nonono96
    Dropping!!
  • sgdadbored
    2021-06-07
    sgdadbored
    Amazing, buy the dip!
  • imsomeonelse
    2021-06-07
    imsomeonelse
    Unm
  • CPCat
    2021-06-07
    CPCat
    It will be a long ride. Why would countries like Ireland forego their advantage by signing up to this agreement? It seems like the big boys trying to show their might, but with no real effect?
  • fatpistachio
    2021-06-07
    fatpistachio
    They shld be dropping
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