LONDON (Reuters) – A group of the world’s richest countries struck a landmark deal on Saturday to close cross-border tax loopholes used by some of the world’s largest companies.
The Group of Seven has said it will support a minimum global corporate tax rate of at least 15% and put in place measures to ensure that taxes are paid in countries where businesses operate.
“After years of discussions, G-7 finance ministers have reached a historic agreement to reform the global tax system to adapt it to the global digital age,” UK Finance Minister Rishi Sunak told the journalists.
The deal, which could form the basis of a global compact next month, aims to end a decades-long “race to the bottom” in which countries have clashed to lure giant companies with rates. very low tax and exemptions.
This in turn has cost their public coffers hundreds of billions of dollars – a shortfall that they now need to recoup all the more urgently to pay the enormous cost of supporting economies ravaged by the coronavirus crisis.
Ministers met in person in London for the first time since the start of the COVID-19 pandemic.
According to a copy of the final deal seen by Reuters, G-7 ministers said they would “commit to an overall minimum tax of at least 15% country by country.”
“We are committed to finding a fair solution on the allocation of taxing rights, with market countries being assigned taxing rights on at least 20% of profits exceeding a 10% margin for the most multinational companies. large and most profitable “, adds the text.
Ministers also agreed to have companies report their environmental impact in a more standard way so that investors can more easily decide to finance them, a key goal for Britain.
Rich countries have struggled for years to agree on a way to generate more revenue from large multinationals such as Google, Amazon and Facebook, which often record profits in jurisdictions where they pay little or no tax.
The administration of US President Joe Biden has given new impetus to the stalled talks by proposing a minimum global corporate tax rate of 15%, higher than the level of countries like Ireland but lower than the lowest level in the G- 7.