G-7 finance ministers make up 15 per cent of the global minimum tax

G-7 finance ministers make up 15 per cent of the global minimum tax
Neighboring countries Negotiations

G-7 finance ministers make up 15 per cent of the global minimum tax

G7 finance ministers agree to impose a minimum tax on large companies

The finance ministers of the seven leading industrialized nations (G7) paved the way for a global minimum tax rate for companies. In the final announcement of the meeting in London, the ministers confirmed the goal of at least 15 per cent global corporate tax.

The seven leading industrialized nations (G7) have spoken out in favor of a 15 percent global minimum tax for large corporations. Olaf Scholes described the deal as a “tax revolution.” Now the G20 crew is about to be brought aboard.

D.The seven leading industrialized nations (G7) have agreed on the basic framework for global tax reform. States want action against taxation by big tech companies like Google and Apple. British Treasury Secretary Rishi Sunak said in London on Saturday that he and his colleagues had signed a similar agreement.

“After many years of discussions, I am pleased that the finance ministers of the G-7 countries have today reached a historic agreement on reforming the global tax system in line with the global tax era. Said.

A minimum of 15 per cent tax is planned for large companies. This is evident from the final announcement of the G-7 meeting of finance ministers. The countries where big companies make their sales should also benefit more than ever from the tax payments made by companies. It should do better for many emerging markets.

The G-20 meeting in July will be crucial

The agreement of the industrialized countries should now be in a big circle – for example, with the G20 with the most important developing countries like China, India and Brazil. The G-20 meeting in Venice in July will be decisive.

The minimum taxation of companies has been wrestled with internationally for many years. The background is the tax avoidance strategies of large corporations, which often move profits mathematically to countries with lower tax rates. Large technology companies pay particular attention.

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Prior to the outbreak of the talks, French Finance Minister Bruno Le Myre said that the digital giants had benefited from the Corona crisis and “made profits that did not exceed any other sector.” Rishi Sunak said, “In a complex, global and digital economy, it is increasingly clear that a tax system largely designed in the 1920s cannot be trusted.”

The epidemic and the resulting gaps in the national budget gave impetus to the debate. Before the crisis, the tax practices of large corporations were criticized, and now it is “unacceptable,” it said from diplomatic circles. The debate has gained momentum again since US President Joe Biden spoke out in favor of a minimum of 15 percent for international companies. Earlier, the United States proposed at least 21 percent.

Olaf Scholes talks about a “tax revolution”

Federal Finance Minister Olaf Scholes (SPD) described the development as a “tax revolution”. “Today, seven of the most important industrialized nations support the idea of ​​a minimum tax on companies,” said Scholes, of the German Press Association. “This is very good news for tax justice and solidarity, and bad news for tax havens around the world.”

So far, corporate tax has to be paid only at the company’s headquarters, but not in the countries where companies make their sales. As a result, many companies have shifted their headquarters to countries with lower corporate taxes. In addition to Great Britain, Germany and the United States, France, Italy, Japan and Canada are members of the G7, as the group of seven leading democratic economic powers calls themselves.

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Joshi Akinjide

Joshi Akinjide

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