October 20, 2018 / 10:12 PM / 24 days ago

Germany's Scholz wants global tax floor to stop evasion

FILE PHOTO: German Finance Minister Olaf Scholz attends a meeting in Berlin, Germany October 16, 2018. REUTERS/Michele Tantussi/File Photo

BERLIN (Reuters) - Germany’s Finance Minister Olaf Scholz has proposed a global minimum rate of corporation tax coupled with tougher measures to prevent tax evaders from stashing their profits in tax havens, newspaper Welt am Sonntag reported.

In a guest article for the Sunday paper, extracts from which were made available on Saturday, Scholz fleshed out proposals that he was considering jointly with France to make it harder for international firms to evade tax.

Both countries are seeking ways to ensure that firms like Amazon (AMZN.O), Apple (AAPL.O) and Google (GOOGL.O) pay domestic taxes in proportion to the profits they earn in Europe’s largest markets, though attempts to harmonize tax rates across the European Union have met stiff resistance from lower-tax members like Ireland.

“We need a worldwide minimum tax level that no state may go below,” Scholz said in the article, adding that any such rules would need to be accompanied by measures to make it harder to move money into tax havens.

Scholz said the internet economy “was exacerbating a problem that we recognize from globalization and that we are trying to address: the placing of profits in low-tax locations.”

Germany, Europe’s largest consumer market, is particularly fertile ground for U.S.-based internet giants, many of which have used offshore structures to minimize their tax exposure to what remains a relatively high-tax economy.

Reporting by Thomas Escritt; Editing by Adrian Croft

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