G7 agrees on ‘historic’ minimum global corporate tax rate | News | DW


[ad_1]

G7 finance ministers pledged on Saturday to commit to a minimum global corporate tax level of at least 15%

The move aims to get multinationals – especially tech giants – to pour more into government coffers hit hard by the pandemic.

“I am delighted to report that today, after years of discussions, G7 finance ministers have reached a historic agreement to reform the global tax system,” said UK Finance Minister Rishi Sunak, who chaired the talks in London.

“It’s complicated and it’s a first step,” Sunak said.

A “historic agreement” hailed

German Finance Minister Olaf Scholz called the deal “historic”.

“This is very good news for tax justice and solidarity and bad news for tax havens around the world,” Scholz said in a statement, adding: “Businesses will no longer be able to dodge their obligations. tax by recording their profits in the least taxed country. ”

French Finance Minister Bruno Le Maire said the group’s commitment was a “starting point”, pledging to increase it further.

“This is a starting point and in the coming months, we will fight for this minimum corporate tax rate to be as high as possible,” said Le Maire.

US Treasury Secretary Janet Yellen said the move “would help the global economy to prosper, level the playing field for business and encourage countries to compete on a positive basis.”

What is the global minimum corporate tax?

The US-led proposal focuses on creating a global minimum corporate tax rate as well as special rules to change the amount and location of corporate taxes.

US President Joe Biden called for a unified minimum corporate tax rate of 15%.

The global minimum tax would only be levied on the 100 largest and most profitable companies in the world.

If a business pays taxes somewhere at a lower rate, it will likely have to pay additional taxes.

Such a move aims to end what Yellen has called a “30-year race to the bottom on corporate tax rates” as countries compete to attract multinationals.

“The G7 watches over its own”

Alex Cobham, chief executive of the Tax Justice Network, called the move a “historic moment” but called it “very unfair”.

In an interview with DW, Cobham said the figure should have been “at least 25%”.

“The way the G7 goes about it with such a low rate … it means the benefits would have been much smaller than they could have been,” the economist said.

“It shows how inadequate the OECD and the G7 are because rich countries set the rules for everyone. We need to transfer this to the United Nations and get a deal that works for everyone, not just the G7 that look for their own income, ”he added.

Reaction of the tech giants

Facebook has said it welcomes the G7’s engagement, despite the risk that the social media company will pay more, its vice president of global affairs said on Saturday.

“We welcome the significant progress,” Nick Clegg tweeted, adding that “it could mean Facebook is paying more taxes, and in different places.”

A spokesperson for online retail giant Amazon said the tax plan was “a welcome step forward.”

“We hope that discussions will continue to move forward with the broader G20 alliance and the inclusive framework,” they added.

Google, meanwhile, said it strongly supports the ongoing work to update international tax rules.

“We hope that countries will continue to work together to ensure that a balanced and lasting agreement is soon finalized,” said a spokesperson for the global research giant.

What else was on the agenda?

After two days of talks, G7 finance ministers backed measures to force banks and businesses to disclose their exposure to climate-related risks, according to a final statement viewed by Reuters.

They also reiterated that digital currency projects should not work until they meet “legal, regulatory and supervisory requirements through proper design and meeting applicable standards,” the statement said.

mvb, fb / mm (AFP, dpa, Reuters)

[ad_2]

About Emilie Brandow

Check Also

Trigon Terminals Set to Nearly Double Terminal Capacity and Advance Green Diversification with New Federal Funding

PRINCE RUPERT, BC, November 16, 2022 /CNW/ – Prince Rupert Trigon Pacific Terminals Limited (Trigon) …

Leave a Reply

Your email address will not be published.