A tax deal between the world’s richest countries brings global governments a step closer to clawing back some power from technology giants that have used century-old regimes to build up wealth eclipsing the economies of most nations.
While a weekend accord struck by Group of Seven finance ministers aims to close the net around all major multinationals, the tech industry is particularly adept at taking advantage of the current system. That’s because its main assets — software code, patents and other intellectual property — are relatively easy to maneuver compared to physical assets.
The result has been that the likes of Facebook Inc., Amazon.com Inc. and Alphabet Inc.’s Google have paid effective tax rates which appeared on a long, steady march toward zero, much to the consternation of European governments in particular.