(London) G7 finance ministers announced a “historic” agreement after a two-day meeting in London on Saturday on a better minimum tax and the better distribution of tax revenue from multinationals, especially digital giants.
The G7 guarantees a minimum global corporate tax rate of “at least 15%”, which, according to their joint statement, indicates a commitment to better distribution of rights. To tax the profits of large multinational corporations.
Rishi Sunak, treasurer of the Treasury, who chaired the meeting, described the deal as a “historic” and “moment of pride” for the group of seven great powers.
The great powers of the G7 (United Kingdom, France, Italy, Canada, Japan, Germany, United States), which have benefited from the renewed interest of the US administration in question since Joe Biden came to power, want to achieve a world corporate tax reform within the spirit of the work carried out within the OECD.
By migrating to countries where the corporate tax rate is very low, it often targets large technology companies that pay bad taxes, despite the tens of billions or hundreds of billions of dollars in profits.
U.S. Treasury Secretary Janet Yellen also hailed the G7 finance ministers as “unprecedented commitment” in a statement on Saturday.
This global minimum tax will end at the base of corporate taxation and bring justice to the middle class and working people in the United States and around the world.
Janet Yellen, U.S. Treasury Secretary
Mr Sunak said the agreement on G7 finance was “a first step and we have G20 finance ministers to make further progress next month,” adding that the compromise reached on Saturday “will allow justice to be done in our planetary tax system.”
The G7 nations want to put an end to tax competition in the world, which, according to them, is hurting everyone at a time when state treasures are being emptied, while digital giants have particularly benefited from the crisis.
In a video posted on his Twitter account after the meeting, French Finance Minister Bruno Le Myre said, “After four years of fighting, France has won its case.”
“This is a starting point and we will fight to keep this minimum tax rate as high as possible in the coming months,” he added.
According to Gabriela Butcher, a volunteer at Oxfam, “setting a global minimum corporate tax rate of just under 15% is too low” and “ending a dangerous race on taxes is too low.
Long distance travel
Many countries, including France, the United Kingdom, Italy or Spain, have already implemented their own digital taxes in the meantime, and discussions with the United States have focused on a timetable for the withdrawal of these national measures in support of international reform.
“This is something we have been talking about for almost a decade. Today, for the first time, there is an agreement on concrete policies on how this reform should be. It is a big step,” Rishi Sunak stressed.
However, he acknowledges that “we still need to go to the G20 and find an agreement with the major powers, so it is difficult to say when a final agreement will be reached.”
This process will continue for many more years, and in addition to the 20 Group, it is necessary to convince the 140 countries working on the tax reform program in the chest of the OECD.
It will be particularly challenging to convince countries that have built their economies on low corporate tax rates, such as Ireland (12.5%), which has attracted the European headquarters of many multinational corporations.