G7 Global Tax Agreement

Lord Forsyth of Drumlean Excerpts

Tuesday 8th June 2021 Lords Chamber

[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.

[Lord Forsyth of Drumlean (Con)]

My Lords, could my noble friend answer the question that was put previously: is it not the case that the US is the main beneficiary in tax revenues from this? Could she deal with the point about Amazon? She says she cannot deal with particular individual taxpayers, but the whole point of this measure is to deal with Amazon, which is destroying retail businesses across the country because they have to pay rates. On the digital service tax, could she confirm that Amazon reacted to it by simply passing on the 2% to its third-party retailers, and that there was no disadvantage to it at all? As my noble friend Lord Leigh has pointed out, Amazon would not be covered by this measure. How can you enter into a deal without knowing the detail in advance?

[Baroness Penn (Con)]

My Lords, as I have said, a lot of the detail is still being worked out. However, I reassure my noble friend on a number of fronts. As part of the work on the detail of the agreement, we are considering how pillar 1 will apply to groups that might have different business lines, some of which may fall within the criteria and others outside them. I would say to both my noble friends, as indeed I did, that the agreement is designed to address specific concerns about digital companies, or companies that do not have physical presences in the countries where they have activities. We are doing other work to address concerns around online retailers; for example, I mentioned the fundamental review of business rates that the Government are currently undertaking.