Global deal on corporation tax nears first stage as G-7 seeks common ground

Topics G-7 summit | corporate | OECD

European governments are increasingly confident a deal will soon be struck with the US on a minimum global corporate tax and related measures to make multinationals pay more to the countries they operate in, according to people familiar with the matter.

 

US President Joe Biden’s administration last week floated a global minimum tax of at least 15 per cent, less than the 21 per cent rate it has proposed for the overseas earnings of US businesses — a level that countries including the UK regarded as too high.

 

While European nations warmly received that offer, they’ve also been pushing the US to focus on measures to ensure multinationals — especially big technology firms such as Amazon.com and Facebook — pay more of their tax in the countries where they operate. US officials have opposed any efforts to target specific industries for taxation, such as tech.

 

In addition to the 15 per cent US offer, European governments see a deal nearing as there is progress in talks toward meeting their demand of ensuring that all digital firms be covered by new rules, according to the people, who spoke on condition of anonymity because the talks are ongoing. An accord among G-7 nations in coming weeks would signal support building toward a broader deal at the July meeting of the Group of 20, which has been managing the talks on international taxation more closely. The plans will still need to find agreement among nearly 140 countries involved in the Organization for Economic Cooperation and Development-led negotiations.

 

G7 finance ministers are holding a virtual meeting on Friday, followed by an in-person gathering June 4-5 in London. The main leaders’ summit takes place in Cornwall, southwestern England, from June 11-13.



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