Tory MPs have voted down Labour’s plea for a minimum rate of corporation tax to apply across the world.
But MPs voted 364 to 261, majority 103, to reject Labour’s amendment to the Finance Bill. No Conservatives voted in favour.
The amendment would have forced Chancellor Rishi Sunak to publish a review within six months on how a global minimum rate of 21% or 25% would affect the taxpayer.
He would have also had to assess its impact on “tax avoidance and evasion”.
Despite the vote, a Treasury minister suggested US President Joe Biden’s proposals for a global minimum rate of corporation tax are a good start needing compromise.
Jesse Norman quoted a comment piece from the Financial Times which welcomed the prospect of reform to ensure multinational firms, such as tech giants, pay a fairer share of tax.
The UK Government has previously insisted it wants an international solution to the “tax challenges” posed by the rise of the tech giants and the digital economy.
But it argued reform should focus on making multinationals pay more tax in the countries where they make sales and operate.
Mr Biden initially proposed a minimum global rate of 21%, but the US treasury department has put forward a plan for a “floor” of 15%, while calling for discussions to continue to “push that rate higher”.
Chancellor Rishi Sunak has previously announced a plan to increase corporation tax from 19% to 25% for large companies by 2023.
Shadow treasury minister James Murray argued the UK was “now the only G7 country not to back the US plan”.
He added: “This is a once-in-a-generation opportunity to grasp international agreement on the global taxation of large multinationals that has evaded our country and others for so long, yet rather than stepping up, our Government is stepping away.”
SNP economy spokeswoman Alison Thewliss said an “agreement will take place in spite of the UK Government’s hesitancy, less global leadership more like pulling teeth”.
But minister Mr Norman told the Commons: “We have always made plain, we have stated in public, we have stated in this chamber, we have stated in public communications that this Government is supportive of both parts of the OECD (Organisation for Economic Co-operation and Development) proposals.”
He added: “(Opposition MPs) quote the Financial Times’s recent article, I’d remind them it says the US proposals have now ‘opened up room for a compromise’, ‘this is a good start’.”
Mr Norman said the discussions could result in “one of the landmark moments in global corporate taxation”, noting: “That is what we’re doing, and in so doing we’re merely following up a tradition and a pattern of leadership that this Government has exercised over several years.”