The G7 agreed to a 15% tax on multinational companies

The finance ministers of the G7, which groups Canada, United States, Japan, France, Germany, Italy and United Kingdom, reached this Saturday a agreement to lay the foundations for the new international tax regime by establishing a universal minimum tax of 15% for large companies.

The British Minister of Finance, Rishi Sunak, confirmed the pact concluded by the ministers meeting in London and explained that it creating a balanced playing field for global businesses.

“After years of debate, the G7 finance ministers have reached a landmark agreement to reform the global tax system to adapt to the global digital age“, Underlined Sunak, according to the British channel BBC.

Global companies like Amazon, Google O Facebook they will be the most affected, since they can now legally tax in one country with advantageous tax conditions the activity they generate in other countries. With this change, rich countries are seeking to avoid a “race to the bottom” of fiscal policies.

In addition, this standard claims that companies pay in the countries where they sell their products and services, not where they report their profits.

The initiative is “to adapt to the global digital age, but above all to making sure the right companies pay the right taxes in the right places and that’s a huge price for UK taxpayers, ”Sunak noted.

The US Treasury Secretary noted that “this global minimum rate Ends the race to the bottom of corporate taxes and secures justice for the middle class and working people in the United States and around the world”.

The meeting of G7 finance ministers will be followed next week by the G7 Leaders Summit, which will meet from June 11 to 13.

Thus, despite the fact that the G7 has no formal role in the process of discussing the new international taxation, a pact within this group would represent a a powerful impetus to reach agreement in the ongoing formal negotiations at the G20 and the OECD.

In this sense, the United States has lowered its aspirations for a minimum corporate tax globally, reducing them by 21% at an effective rate of 15% in order to broaden the consensus in this regard.

On Friday, G7 representatives began meetings in London to agree on plans to help low-income countries fight the COVID-19 pandemic, curb global warming and tackle tax evasion.

“I am determined to work together and come together to tackle the world’s most pressing challenges and I am very optimistic that we will achieve concrete results this weekend,” Sunak said on Friday.

The G7 is under pressure to provide vaccines to low-income countries facing a third wave of COVID-19 AND fund climate change projects.

The International Monetary Fund, the World Health Organization, the World Bank and the World Trade Organization have said that theEnding the pandemic and securing global economic recovery should be the priority of the G7.

(With information from Europa Press and AP)

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