“Group of 7”: Measures to ensure that taxes are paid in the countries where companies operate

Historic Agreement on Taxes for Multinational Corporations

The "Group of 7" will support a minimum global corporate tax of at least 15%.

Reuters

A group of the world's richest countries reached in London yesterday a historic agreement to plug cross-border tax loopholes that some of the largest companies are exploiting.

The G7 said it would support a minimum global corporate tax of at least 15% and take measures to ensure that taxes are paid in the countries in which companies operate.

The deal, which could form the basis for a global deal next month, aims to end a decades-old "race to the bottom" in which countries compete to lure giant corporations with ultra-low taxes and exemptions.

This, in turn, has cost the public coffers of these countries hundreds of billions of dollars, which makes them now urgently need to compensate for this shortfall.

British Finance Minister Rishi Sunak told reporters: "After years of discussions, the G7 finance ministers reached a historic agreement to reform the global tax system, to make it fit for the digital age."

According to a copy of the final agreement seen by "Reuters", the ministers of the group's countries said that they will adhere to "a global minimum tax limit of no less than 15% based on what is determined by each individual country."

They added, "We pledge to reach an equitable solution on the allocation of tax rights, as countries will have rights to tax at least 20% of the profits that exceed the 10% margin of the largest and most profitable multinational companies."

Ministers also agreed to move towards requiring major companies to announce their environmental impact in a more model way, so that investors can easily decide whether to fund them, which is a key objective for Britain.

Rich countries have been scrambling for years to agree on a way to collect more taxes from large multinational corporations such as Google, Amazon and Facebook, which usually limit their profits to low-tax countries or even grant exemptions.

Follow our latest local and sports news and the latest political and economic developments via Google news