The Group of Seven industrial countries reached an agreement on a minimum global corporate tax rate and put in place measures to close tax loopholes for large international companies operating across borders.
Finance ministers from the Group of Seven (G-7) countries said in London that they would support maintaining the minimum global corporate tax rate at least 15 percent. In a statement, the finance ministers said they would “commit to maintaining a minimum global tax rate of at least 15 percent on a country-specific basis.”
The seven finance ministers also set out measures to ensure that corporate taxes are paid in the countries where business is conducted. The statement said, “We commit to reaching an equitable solution on the distribution of tax rights, giving market countries the right to tax at least 20 percent of the portion of profits in excess of 10 percent of the largest and most profitable multinational enterprises.”
The seven finance ministers also agreed to take steps to make it easier for investors to decide whether to invest by allowing large companies to declare their environmental impact in a more standard way.
British Chancellor of the Exchequer Rishi Sunak told reporters, “After years of discussion, the seven finance ministers have reached a historic agreement to reform the global tax system and adapt it to the era of global digitalization.”
Reuters said the agreement could lay the groundwork for a global deal next month to end a “race to the bottom” policy that has seen multiple countries compete for decades to attract business investment with ultra-low tax rates and exemptions that have created hundreds of billions of dollars in public burdens.
The report said this is the first face-to-face meeting of finance ministers of seven countries after the outbreak of the new crown epidemic. U.S. President Joe Biden’s proposal to set the minimum global corporate tax rate at 15 percent breathed new life into the stalled negotiations.