Finance ministers of the G7 countries committed on Saturday to a global minimum corporate tax level of at least 15%
The deal aims to get multinational corporations – tech giants in particular – to pay more into government coffers hard hit by the pandemic.
“I am pleased to announce that, after years of discussion, the G7 finance ministers today reached an historic agreement on reforming the global tax system,” said UK Treasury Secretary Rishi Sunak, who chaired the talks.
“The G7 decision on international tax justice is historic,” said Federal Finance Minister Olaf Scholz.
“This is very good news for tax justice and solidarity, and bad news for tax havens around the world.”
French Finance Minister Bruno Le Maire said the group’s engagement was a “starting point” and pledged to increase it further.
“This is a starting point and in the coming months we will fight to ensure that this minimum corporate tax rate is as high as possible,” said Le Maire.
What is the minimum global corporate income tax?
The US-led proposal focuses on creating a global minimum corporate tax rate as well as special regulations to change how much taxes companies pay and where they are paid.
US President Joe Biden had called for a uniform corporate tax rate of 15 percent.
The global minimum tax would only be levied on the 100 largest and most profitable companies in the world.
If a company pays tax anywhere with a lower tax rate, it would likely have to pay additional tax.
One such deal aims to end what US Treasury Secretary Janet Yellen called a “30 year race to the bottom of corporate tax rates” as countries compete to attract multinational corporations.
What else was on the agenda?
After two days of talks, the G7 finance ministers also called for greater coordination to measure the impact of companies on the environment and warned of the risk of fragmentation as local legal systems follow different approaches.
“We support the transition to mandatory climate-related financial information that provides market participants with consistent information that is useful for decision-making …”, it says in a final communiqué.
“This will help mobilize the trillions of dollars in private sector funding and strengthen government policies to meet our net-zero commitments,” said a growing number of large economies’ net zero carbon commitments to reach.
fb / rc (AFP, dpa, Reuters)