G7 nations reach ‘historic’ agreement over global corporate tax
LONDON: The G7 countries have reached a historic agreement on the imposition of taxes on large multinational corporations. The new agreement is aimed at closing the cross-border tax loopholes exploited by some of the world’s largest companies.
The G7 countries have made it clear that a global minimum corporate tax of at least 15% must be approved. The countries also demanded that steps be taken to ensure that taxes are paid in countries where industries operate.
Following the two-day meeting in London, the G7 said that they had committed to a global minimum tax of at least 15% on a “country-by-country” basis.
The G7 statement reads: “We also commit to a global minimum tax of at least 15% on a country by country basis. We agree on the importance of progressing agreement in parallel on both pillars and look forward to reaching an agreement at the July meeting of G20 Finance Ministers and Central Bank Governors.”
This is the first in-person G7 meeting since the COVID-19 pandemic began. The G7 comprises of Britain, Canada, France, Germany, Italy, Japan and the United States. Minister for Finance Paschal Donohoe also attended the meeting in his capacity as the current president of the Eurogroup (Chairman of the Eurozone Finance Ministers).
Minister Donohoe said that any final agreement on reforming global corporate tax regulations must address the requirements of both small and large countries. “I look forward now to engaging in the discussions at OECD. There are 139 countries at the table, and any agreement will have to meet the needs of small and large countries, developed and developing,” he added.
In a video message posted on Twitter, UK Finance Minister Rishi Sunak said that after years of negotiations, the G7 finance ministers had reached a historic agreement to reform taxes to suit the global digital age.
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