The minimum global corporate income rate of the largest companies, according to the plan of the members of the “Big Seven,” will be at least 15%.
On Saturday, a group of the world’s wealthiest powers struck a landmark agreement to close international tax loopholes still being exploited by some of the world’s largest corporations.
The finance ministers of the G7 countries said that the G7 supports the establishment of a minimum global corporate tax rate of at least 15% and pledged to ensure full payment of taxes in the countries where corporations operate.
“After years of discussions, the G7 finance ministers have reached a historic agreement to reform the global tax system to fit the global digital age,” British Finance Minister Rishi Sunak told reporters.
US Treasury Secretary Janet Yellen, who participated in today’s meeting, welcomed the conclusion of the agreement on the establishment of a minimum corporate tax rate. Speaking in London after the meeting, Yellen said that the process of reaching this agreement was “difficult,” adding that negotiations on this issue had been going on for about eight years.
“This process has stalled under the Trump administration. And so I really consider it a historic achievement. It shows that multilateral cooperation can be successful,” Yellen said., “I saw serious cooperation and a desire to solve a much broader range of global problems in a coordinated manner.”
The agreement, which could form the basis of a global pact to be signed next month, aims to end a decade-long “race of concessions.” This term refers to the competition of countries with each other in an attempt to attract investment capital, easing their tax regime and introducing benefits for large taxpayers.
This, in turn, has cost the public coffers of all these countries hundreds of billions of dollars – a deficit that now needs to be urgently filled to offset the huge costs of maintaining an economy depleted by the global pandemic crisis.
For the first time since the COVID-19 pandemic began, G7 finance ministers held face-to-face talks in London. According to a copy of the agreement that was made available to Reuters, the G7 ministers said they would “commit to setting a global minimum corporate tax of at least 15% for each country.”
“We are committed to achieving a fair solution to the distribution of tax rights, while at the same time… countries will have the right to impose a profit tax of at least 20% for the part of the profits of the most successful multinational companies that exceed the 10% margin, ” the text says.
The ministers also agreed to standardize the reporting of companies on their environmental impact to make it easier for investors to make decisions about financing these enterprises. The UK insisted on including this clause in the agreement.
Rich countries have spent years trying to find a way to increase their treasury revenues by taxing large multinational corporations such as Google, Amazon, and Facebook, which are often registered in offshore zones-jurisdictions where companies pay little or no taxes. President Joe Biden’s administration has given fresh impetus to stalled negotiations by proposing a minimum global corporate tax rate of 15%.