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Friday, February 23, 2024

G7 Countries Adopt Historic Decision on Minimum Corporate Tax of 15%

Representatives of the G7 countries last weekend reached a landmark agreement on taxation. The goal is to deny multinational corporations the opportunity to go to tax havens and force them to pay taxes in the countries in which they operate.

The G7 countries, represented by finance ministers, have agreed to support a minimum global corporate tax rate of 15%.

The ministerial meeting in London marks the first face-to-face meeting since the outbreak of the pandemic. On the US side, the issue was overseen by Janet Yellen, the former head of the Fed and the current head of the Treasury.

“The G7 finance ministers have reached a historic agreement to reform the global tax system to match the digital age,” said British Treasury Secretary Rishi Sunak, who is chairing the meeting.

European countries have already introduced digital taxes to combat tax evasion in the region by giants such as Google and Facebook. In light of the new deal, Yellen said European countries would drop existing taxes on digital services, which she said discriminated against American companies. She also noted that G7 finance ministers have made an “important, unprecedented commitment” to close a deal that will end the race to cut corporate taxes.

The introduction of a minimum tax has been discussed in developed countries for more than one year. The trends were followed by global giants, for whom the current decision is no longer a surprise.

Now the question of the minimum tax will be raised at the G20.

The G7 includes the US, Germany, UK, Japan, France, Italy and Canada.

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