G7 ministers close to 15% global tax deal

A historic agreement on a global minimum rate of corporation tax could be agreed this weekend.

Finance ministers from the G7 group of leading economies, meeting in London, are confident of striking a deal that would tackle the problem of multinational companies targeting low tax regimes.

Ireland, which has long gained an advantage from its 12.5% corporation tax rate, is being urged to come on board.

US President Joe Biden has been pushing for a global rate of 15% ‘at least’, with rich nations struggling for years to agree a way to raise more cash from large multinationals such as Google, Amazon and Facebook, which often book profits in jurisdictions where they pay little or no tax.

German finance minister Olaf Scholz said a 15% rate would help pay back debts that have built up during the pandemic. He was “absolutely confident” there would be an agreement.

UK Chancellor Rishi Sunak said he was “confident” of reaching a global agreement on digital taxation ahead of a meeting of world finance leaders.

Bruno Le Maire, the French finance minister, said the G7 was on the brink of a “historic agreement” that would build unstoppable momentum to implement lasting tax reforms. Following the G7 meetings in London, negotiations to reform the global tax system will take place at a wider G20 meeting in Venice next month.

It would then progress to negotiations at the Organisation for Economic Co-operation and Development in Paris between 135 countries with the aim of a deal being agreed in October.

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