G7 Nears Historic Deal to End Global Corporate Tax Race to the Bottom
The Group of Seven economies are close to finalizing an agreement that establishes a 15 percent global minimum corporate tax. This deal aims to stop multinational tech companies from shifting profits to low-tax jurisdictions.
The Group of Seven economies are nearing a historic agreement on the corporate taxation of multinationals and digital tech firms. Officials make significant progress in talks to create new rules that prevent the world's largest companies from shifting profits to countries with low corporate tax rates. A G7 pact is possible by the end of this week.
The acceleration in these negotiations comes after the United States agrees to accept a global minimum corporate tax rate of at least 15 percent. France, Germany, and Italy view this scaled-back proposal as a strong foundation for an international deal. US President Joe Biden lowers his initial target of 21 percent to secure consensus among the G7 nations.
This potential G7 agreement provides crucial momentum for the Organisation for Economic Co-operation and Development, which is leading broader tax reform negotiations with 135 countries. A successful pact ensures that massive US digital tech firms, such as Amazon and Facebook, pay more taxes in the countries where they actually make their sales rather than routing profits through low-tax havens like Ireland.