How will the G7 tax deal affect big technology companies?
The G7 group, an organisation made up of the world's seven largest so-called advanced economies, has agreed to a ‘historic’ deal aimed at making the biggest companies such as Apple, Microsoft, Google and Facebook pay more tax.
The two pillar solution
During the talks, Finance Ministers agreed on the principles of a two Pillar global solution to tackle the tax challenges. Under Pillar One of the agreement, the largest and most profitable multinationals will be required to pay tax in the countries where they operate, and not just where they have their headquarters.
The rules would apply to global firms with at least a 10% profit margin – and would see 20% of any profit above the 10% margin reallocated and then subjected to tax in the countries they operate.
However, since the move would only apply on “profit exceeding a 10% margin for the largest and most profitable multinational enterprises,” experts have said that it could rule out the tech giant Amazon whose profit margin in 2020 was only 6.3%.
Richard Murphy, Professor of Accounting, Sheffield University Management School, said on Twitter that while the deal is historic and a step in the right direction, the 15% minimum tax rate is “far too low.”
“And why 10%? That brings some pharmaceuticals in but leaves Amazon out. Is that what was intended?” Mr Murphy tweeted.
Experts, including those from the Fair Tax Foundation, also point out that under this approach, Amazon would pay taxes for its subsidiaries like Amazon Web Services – the tech giant’s web hosting arm – which had a profit margin of 30% in 2020.
Under Pillar Two, the G7 also agreed to the principle of at least 15% global minimum corporation tax operated on a country by country basis, creating a more level playing field for UK firms and cracking down on tax avoidance.
The system will mean the UK will raise more tax revenue from large multinationals and help pay for public services here in the UK. The agreement will now be discussed in further detail at the G20 Financial Ministers & Central Bank Governors meeting in July.
Chancellor Rishi Sunak said: “These seismic tax reforms are something the UK has been pushing for and a huge prize for the British taxpayer - creating a fairer tax system fit for the 21st century.
“This is a truly historic agreement and I’m proud the G7 has shown collective leadership at this crucial time in our global economic recovery.”
What are the G7 and what do they do?
The G7 (Group of Seven) is an organisation made up of the world's seven largest so-called advanced economies. They are Canada, France, Germany, Italy, Japan, the UK, and the United States.
The G7, originally G8, was set up in 1975 as an informal forum bringing together the leaders of the world’s leading industrial nations. The annual G7 summits have over the years developed into a platform for determining the course of multilateral discourse and shaping political responses to global challenges. It complements the role of the G20, which is widely regarded as the framework for ongoing global economic coordination.
How AWS helps NASCAR delight its fans
AWS needs no introduction to readers of Technology Magazine but we rarely get an opportunity to look closely at how it serves the sports sector. All major sports draw in a huge supporter base that they want to nurture and support. Technology is the key to every major sports organization and enabling this is the driving force for AWS, says Matt Hurst, Head of Global Sports Marketing and Communications for AWS. “In sports, as in every industry, machine learning and artificial intelligence and high performance computing are helping to usher in the next wave of technical sports innovation.”
AWS approaches sports in three principal areas. “The first is unlocking data’s potential: leagues and teams hold vast amounts of data and AWS is enabling them to analyze that data at scale and make better, more informed decisions. The second is engaging and delighting fans: with AWS fans are getting deeper insights through visually compelling on-screen graphics and interactive Second Screen experiences. And the third is rapidly improving sports performance: leagues and teams are using AWS to innovate like never before.”
Among the many global brands that partner with AWS are Germany's Bundesliga, the NFL, F1, the NHL, the PGA Tour and of course NASCAR. NASCAR has worked with AWS on its digital transformation (migrating it's 18 petabyte video archive containing 70 years of historical footage to AWS), to optimize its cloud data center operations and to enable its global brand expansion. AWS Media Services powers the NASCAR Drive mobile app, delivering broadcast-quality content for more than 80 million fans worldwide. The platform, including AWS Elemental MediaLive and AWS Elemental MediaStore, helps NASCAR provide fans instant access to the driver’s view of the race track during races, augmented by audio and a continually updated leaderboard. “And NASCAR will use our flagship machine learning service Amazon SageMaker to train deep learning models to enhance metadata and video analytics.”
Using AWS artificial intelligence and machine learning, NASCAR aims to deliver even more fan experiences that they'd never have anticipated. “Just imagine a race between Dale Earnhardt Sr and Dale Jr at Talladega! There's a bright future, and we're looking forward to working with NASCAR, helping them tap into AWS technology to continue to digitally transform, innovate and create even more fan experiences.”
Just as AWS is helping NASCAR bridge that historical gap between the legacy architecture and new technology, more customers are using AWS for machine learning than any other provider. As an example, who would have thought five years ago that NFL would be using ML to predict and prevent injury to its players? Since 2017, the league has utilized AWS as its official cloud and ML provider for the NFL Next Gen Stats (NGS) platform, which provides real-time location data, speed, and acceleration for every player during every play on every inch of the field. “One of the most potentially revolutionary components of the NFL-AWS partnership,” says Matt Hurst, “is the development of the 'Digital Athlete,' a computer simulation model that can be used to replicate infinite scenarios within the game environment—including variations by position and environmental factors, emphasizing the league's commitment to player safety.”