G7 nations to tax digital firms Google, Facebook

Chantilly: G7 finance ministers meeting in France agreed a plan for taxing digital companies such as Facebook and Google that will set a minimum level of taxation for them.

Ministers "fully supported a two-pillar solution to be adopted by 2020", said a statement from France which holds the rotating chairmanship of the group of world's most developed countries.

"New rules should be developed to address new business models... allowing companies to do business in a territory without any physical presence," it said.

"Ministers agreed that a minimum level of effective taxation... would contribute to ensuring that companies pay their fair share of tax," the statement said.

A French official, who asked not to be named, said the tax level would have to be agreed in the future. "The tax level to be set would depend on concrete design features of the rules," the statement said.

"The G7 looks forward to further progress in the context of the G20 and a global agreement on the outlines of the architecture by January 2020," it added.

The consensus reached at the G7 -- which sources said came after talks that lasted into the early hours of Thursday morning -- came after a bitter dispute between France and the US last weeks.

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