Tax on Big Tech
There was an agreement among G20 finance ministers after their recent meeting in Japan on the need to speed up plans to do a proper overhaul on cross-border corporate tax given the increasing difficulties of taxing digital giants who operate in many different countries.
At the moment, they currently circumvent higher taxes by booking their sales in the lowest tax jurisdiction in which they operate.
However, the finance ministers have agreed to put together new rules BY 2020, that will cover the likes of the American FAANGs.
Funnily enough, the Americans are grumbling about this given their exposure in this area and no doubt places like Ireland aren’t too keen either because they are benefiting from tech jobs and tax revenues.
At the end of the day, the Devil will be in the detail of any kind of agreement and I wouldn’t mind betting that Trump will stick his oar in if he thinks US digital companies are being treated too harshly (which I pretty much think he will).
Arcadia’s day of judgement
The other thing I wanted to talk about briefly today was the proposed merger between United Technologies and Ratytheon.
This will create a $100bn aerospace and defence behemoth that would become the world’s second biggest such company behind Boeing and its product line-up would include engines and seats for jetliners and F-35 jets as well as Patriot missile launchers and space suits.
It is thought that this merger would be unlikely to meet any resistance from antitrust authorities as there is very little overlap in the companies’ activities.
This merger is probably the result of the Pentagon putting more pressure on its contractors to cut costs and invest more in new technologies.
I would imagine that this mega-merger is going to get other companies in Europe and elsewhere to look to do the same in order NOT to get left behind.