The G7 is expected to move closer to an agreement on corporate tax for multinational companies, paving the way for a new global tax system that will target some of the largest corporations in the world.
A pact between the major economies could be struck as early as Friday after progress in talks among top officials in recent days, the Financial Times reported.
Continue reading: Labor urges Britain to support Biden’s global corporate tax revision
An agreement would be an important precursor to formal negotiations that take place at the OECD in Paris between the G20 countries in the broader sense.
It is part of a long-standing effort to overhaul the global corporate tax system and combat multinational corporations making profits in low-tax areas and making sure tech giants pay their fair share.
Under President Joe Biden, the US has pushed for an agreement between the G7 countries to accelerate broader OECD talks with the aim of reaching a global deal in the coming months.
The US agreed last week to accept a minimum rate of 15 percent – less than its previous target of 21 percent. France, Germany and Italy have since stated that this level is a good basis for securing an international agreement by July.
“The world is closer than ever to a global minimum tax,” US National Security Advisor Jake Sullivan wrote in a tweet over the weekend.
“Nice to hear the positive response to our suggestion. This is what it looks like when you get the world to end the race to the bottom. “
If Treasury Ministers can reach an agreement in the coming weeks, it could be formally signed by G7 leaders at a summit in Cornwall in June. The G20 has announced that it will conclude a deal by the summer.
Continue reading: Labor increases pressure on Rishi Sunak over Biden’s global tax plan
In the UK, the Labor Party has put pressure on Chancellor Rishi Sunak to support a new minimum corporate tax rate as part of the revision.
Shadow Chancellor Rachel Reeves and Shadow Foreign Secretary Lisa Nandy have jointly written to the government that the proposal is a “golden opportunity to deter large multinational corporations from avoiding UK taxes”.