G7 Global Tax Agreement

Lord Tunnicliffe Excerpts

Tuesday 8th June 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, I cannot comment on individual companies. As part of the further work we are doing, we are considering how pillar 1 will apply to groups that have different activities and business lines, some of which may meet the scoping criteria and some of which may not. Pillar 1 is designed to respond to concerns around international tax rules not adequately dealing with digital businesses generating profits in countries where they do not have physical presences. Online sales businesses are not necessarily within that. We recognise the concerns about tax treatment of online retailers; that is why we are doing other work across the tax system, such as the fundamental review of business rates. In the call for evidence we asked about the scope and potential impacts of an online sales tax, for example.

[Lord Tunnicliffe (Lab)]

My Lords, I recognise that the Minister does not feel she is able to offer an estimate of the amount of additional tax, but could she at least give us an indication of when the additional tax might arise?

[Baroness Penn (Con)]

My Lords, that is also subject to ongoing negotiations, including at the G20 next month. I assure the noble Lord that the digital services tax is intended to stay in place until we have implemented the new international agreement, not just agreed it in principle, so those revenues will continue to flow.