The Group of Seven (G-7) wealthy democracies agreed Saturday to support a global minimum corporate tax of at least 15 percent in order to deter multinational companies from avoiding taxes by stashing profits in low-rate countries.
G-7 finance ministers meeting in London also endorsed proposals to make the world’s biggest companies – including U.S.-based tech giants – pay taxes in countries where they have lots of sales but no physical headquarters.
Britain’s Treasury chief Rishi Sunak, the meeting’s host, said the deal would “reform the global tax system to make it fit for the global digital age and crucially to make sure that it’s fair, so that the right companies pay the right tax in the right places.”
U.S. Treasury Secretary Janet Yellen, who attended the London meetings, said the agreement “provides tremendous momentum” towards reaching a global deal that “would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world.”
France cheered Saturday’s agreement and claimed credit for acting as its catalyst.
“We made it! After 4 years of battle, a historic accord was reached with G- member states,” French Finance Minister Bruno Le Maire tweeted. “France can be proud!”
The meeting of finance ministers came ahead of an annual summit of G-7 leaders scheduled for June 11-13 in Cornwall, England. The U.K. is hosting both sets of meetings because it holds the group’s rotating presidency.
The endorsement from the G-7 could help build momentum for a deal in wider talks among more than 140 countries being held in Paris as well as a Group of 20 finance ministers meeting in Venice in July.
The G-7 has also been facing pressure to provide vaccines for low-income countries facing new surges of Covid-19 infections and to finance projects to combat climate change. A statement on Saturday from the two-day finance ministers’ meeting said only that they welcomed increased funding commitments by member countries and looked forward to more. SOVEREIGNPH