G-7 countries reach historic agreement on global tax reform

UK Finance Minister Rishi Sunak (from left), US Finance Minister Janet Yellen, IMF Managing Director Kristalina Georgieva, and Canada Finance Minister Chrystia Freeland on the first day of the Seven Treasury Meetings at Lancaster House in London June 4, 2021.

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London — The Minister of Finance of developed countries, known as the Group of Seven, supports the US proposal to require companies around the world to pay at least 15% tax on their earnings.

“After years of debate, we are pleased to announce today that the G-7 Finance Minister has reached a historic agreement to reform the global tax system to suit the global digital era. “Make the right companies pay the right taxes in the right places,” UK Treasury Minister Risi Snack said in a video statement on Saturday.

“Under the principle of breakthrough reform, the largest global companies with a rate of return of at least 10% are targeted, and if the rate of return exceeds 10%, 20% is redistributed and taxed in the country of sale. “I will.” In a series of tweets.

“The G7 also agrees on the principle of the world’s smallest corporate tax on at least 15% of large corporations operating in each country, creating a more equitable competition for UK companies and cracking down on tax avoidance,” he said. .. Added.

Once confirmed, it represents an important development in global taxation.

President Joe Biden His administration initially proposed a global tax rate of at least 21% to put an end to the lowest competition in various countries to attract international companies. However, after rigorous negotiations, a compromise of over 15% Has been reached.

Global arrangements in this area would be good news for countries struggling to raise money to rebuild their economies after they have rebuilt. Coronavirus crisis.

But Biden’s idea was not accepted with the same level of excitement around the world. For example, the United Kingdom, which is also a member of the G-7, did not immediately express its support for this proposal.

US President Joe Biden addressing a meeting with a bipartisan parliamentary group.

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This problem, European Union In addition, different member countries have different corporate tax rates, which can attract well-known companies. For example, Ireland has a tax rate of 12.5%, while France has a tax rate of 31%.

Ireland’s Treasury Minister Paschal Donohoe spoke in April, according to the British Guardian, saying that smaller countries cannot accommodate the size of larger ones and should be allowed to lower their tax rates.

The world’s most powerful economies have been in conflict for some time over taxation, especially in the wake of plans to tax more digital giants. Under President Donald Trump, the United States violently opposed digital tax initiatives in various countries and threatened to impose trade tariffs.

G-7 countries reach historic agreement on global tax reform

Source link G-7 countries reach historic agreement on global tax reform

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