US President Joe Biden walks with Italian Prime Minister Mario Draghi, French President Emmanuel Macron and European Commission President Ursula von der Leyen after speaking for the G-7 with guests at the G-7 Summit in Carbis Bay, Cornwall, UK -7 family photo posed 11, 2021. Patrick Semansky / Pool via REUTERS
WASHINGTON (Reuters) – The meeting of G7 leaders in the UK will support US President Joe Biden’s proposal for a minimum global corporate tax of at least 15%, White House national security adviser Jake Sullivan said on Friday Twitter.
The US Treasury Department proposed a minimum global corporate income tax of at least 15% in May to end a downward spiral in corporate tax rates.
“America is rallying the world to get big multinational corporations to pay their fair share so we can invest in our middle class at home,” Sullivan tweeted.
By helping the move, the big economies are trying to deter multinational corporations from moving profits – and tax revenues – to low-tax countries, regardless of where their sales are being made.
The current global tax rules date back to the 1920s and struggle with multinational tech giants who sell services remotely and attribute much of their profits to intellectual property in low-tax areas.
Industry lobbyists say US tech giants like Facebook and Amazon could benefit from the agreement to introduce a minimum global corporate tax rate of 15% if the final deal also removes increasingly popular taxes on digital services. reut.rs/359z1u1
The decision was expected after G7 tax officials at a meeting on June 5 endorsed a tax rate of at least 15%. The US Treasury said the G7 approval would spur negotiations on a broader G20 finance meeting in Italy in July.
US Treasury Secretary Janet Yellen and her counterparts from Germany, Indonesia, Mexico and South Africa supported the move in a column published on Wednesday by the Washington Post.
They said they were confident that the global minimum tax rate could ultimately be raised above 15%, citing “the ambition of the discussions so far”.
Reporting by Nandita Bose and Andrea Shalal; Additional coverage from Eric Beech; Editing by Mohammad Zargham and Alistair Bell