The G7 on the verge of a ‘changing the world’ deal on corporate tax abuse Business News

The G7 group of richest countries in the world have said they are on the verge of concluding a landmark international tax deal to close the net on multinational companies operating the system.

Finance ministers from UK, US, Japan, France, Canada, Germany and Italy negotiated a global minimum corporate tax rate as they met in person for the first time since the start of the pandemic.

Hosting the meeting in London on Friday and Saturday, British Chancellor Rishi Sunak said the world cannot “continue to rely on a tax system that was largely designed in the 1920s”.

Bruno Le Maire, France’s finance minister, said the group was “just a millimeter away” from a deal that would raise taxes on companies such as tech giants Google, Amazon and Facebook which account for profits in low-tax states.

Olaf Scholz, Germany’s finance minister, was also convinced the talks would end with a world-changing deal.

“These are very fruitful discussions, we are making progress and I am absolutely convinced that we will get agreements today and tomorrow, and we will be able to have a very clear message on global corporate taxation,” he said. he told the BBC.

“We will have a deal that will truly change the world.”

The United States has proposed a minimum global corporate tax rate of 15 percent, which is lower than the lowest in the G7 but higher than countries like Ireland at 12.5 percent.

Mr. Le Maire described this as “just a starting point”.

“We need something credible,” he said. “We are still working on this very delicate point of the rate. “

In a briefing after Friday’s meeting, a spokesperson for the Treasury said: “Sunak has made it clear that large digital companies should pay an appropriate level of tax where they operate so that countries can generate income and invest. in their public services – a priority for the government – and stressed that “opportunities to make truly sustainable reforms like this do not present themselves very often.”

Mr Sunak said he was “extremely optimistic” about the concrete results of the two-day summit.

Any deal reached by the G7 group would still require broader global negotiations at a G20 meeting in Venice in July and at the Organization for Economic Co-operation and Development in Paris.