G20 finance ministers sign onto new proposal to tax big tech companies

The G20 finance ministers have signed an agreement that will place a tax on tech giants by 2020 in an effort to stop companies from using tax loopholes to pay less tax than local businesses.

According to the U.K.’s Telegraph, the ministers met in Japan and intend to apply the tax to big companies like Facebook and Google.

The new rules will be two-fold, first requiring companies to pay a tax on the profit made in a country, despite not having a physical presence, 9to5Mac reported. Second, to create a measure in case companies find new loopholes.

“We welcome the recent progress on addressing the tax challenges arising from digitisation and endorse the ambitious program that consists of a two-pillar approach,” the communique said, according to the Telegraph.

It’s been reported that the U.S. might push back on the proposed plan. U.S. Treasury Secretary Steven Mnuchin said the U.S. “has significant concerns with the two current taxes that are being proposed by France and the U.K.”

Source: The Telegraph, 9to5Mac