Brussels (Brussels Morning) The G7 is close to reaching agreement on a model for the taxation of multinational companies, which would set the ground for a global agreement later this year, according to Monday’s Financial Times.
G7 officials have made progress in recent days and a deal could be clinched as early as Friday, limiting the ability of multinationals to report profits in low-tax havens and forcing US tech giants to pay more taxes in countries where they generate revenues.
The US administration has been pushing for a G7 agreement to pave the way for a deal under the auspices of the Organisation for Economic Co-operation and Development (OECD) in the coming months.
15% minimum tax
The US revised its target for a global minimum corporate tax rate from 21% to 15% with the aim of gaining more support for the move.
US President Joe Biden’s administration insists the introduction of a global minimum corporate tax is inseparable from the push for paying taxes in countries where revenues are generated.
While Germany and Italy support the introduction of a global tax, France and the UK are focused on location of tax payments.
UK officials and ministers stress the importance of the latter, adding they want to confirm the US is serious about forcing its tech giants to pay taxes where they generate revenues.
Deal confirmed next month
According to officials, G7 finance ministers are to hold a virtual meeting on Friday and will meet in person on 4 and 5 June, when they could agree on the outlines of a deal.
If the finance ministers reach an agreement, G7 leaders could then formalise it at their summit slated for 11 to 13 June in Cornwall. On Saturday, US National Security Advisor Jake Sullivan, noted that “the world is closer than ever before to a global minimum tax“.
“This is what it looks like to lead the world to end the race to the bottom”, he commented.
