U.S. tech giant shares barely react to G7 tax deal

FILE PHOTO: The logos of Amazon, Apple, Facebook and Google in a combination photo

U.S. tech giants stocks barely reacted on Monday to a groundbreaking global minimum corporate tax treaty agreed between the world’s richest nations. Analysts said it will need support from low-tax countries to have a significant impact on companies’ bottom line.

The advanced economies of the Group of Seven (G7) agreed on Saturday to support a minimum global corporate tax rate of at least 15%, and the focus is now shifting to the G20 countries for a broader agreement on the new tax proposals.

Analysts say the tax deal would not harm businesses unless agreed with tax havens like Ireland, whose economy is booming due to the influx of billions of dollars in investment from multinationals due to lower taxes.

Shares from Facebook (FB.O), (AMZN.O), Apple (AAPL.O), Microsoft (MSFT.O) and Google parent Alphabet all fell between 0.4% and 0.7%. Europe’s technology stocks index (.SX8P) was flat.

“The details of the implementation have yet to be ironed out and possibly watered down further,” said Marija Vertimane, senior strategist at State Street Global Markets.

Dublin, which has resisted attempts by the European Union to harmonize its tax rules, is unlikely to accept a higher minimum rate without a fight.

“I would see the current proposal as a small plus for the market,” added Vertimane, referring to lower levies than originally discussed.

The G7 proposals are aimed at tech companies that sell services remotely and attribute much of their profits to intellectuals duly held in low-tax countries. Continue reading

“The immediate impact on the market is likely to be minimal,” said Ian Williams, economic and strategy research analyst for Peel Hunt.

“No G7 nation is charging such a low price right now, and the details, including the approval of numerous smaller countries, take a lot of work.”

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