The G7 group of wealthy nations has reached a “historic agreement” on taxing multinational companies. The agreement will ensure that tech giants pay more tax where they operate. It also pledges to introduce a global minimum corporate tax rate of 15 percent.
The deal – agreed on by Canada, France, Germany, Italy, Japan, the UK, and the US – will ensure that multinationals pay more tax where they operate, the Financial Times said. This is to avoid companies setting up local branches in countries with low corporate tax rates and then declaring their profits there, the BBC reported. The “first pillar” of the agreement would apply to global companies with at least a 10 percent profit margin, the BBC said. A 20 percent tax on any profit above that margin would be reallocated and taxed in the countries where they make sales, Sunak said on Twitter.
Finance ministers for some of the world’s wealthiest nations have reached a “historic agreement” to tackle tax abuses by internet giants and to introduce a global minimum corporate tax rate of 15 percent. “I am delighted to announce that today after years of discussion G7 finance ministers have reached a historic agreement to reform the global tax system,” Rishi Sunak, the UK’s Chancellor of the Exchequer, said after a Group of Seven (G7) meeting in London. “To make it fit for the global digital age, but crucially to make sure that it is fair so that the right companies pay the right tax in the right places and that’s a huge prize for British taxpayers,” Sunak added. It is likely to affect tech giants, including Amazon, Facebook, and Google, Metro reported.
