G7 TAX DEAL
What is the news : Finance Ministers from the Group of Seven (G7) nations have reached a landmark agreement in London setting a global minimum corporate tax rate.
- To counter tax avoidance through measures to make companies pay in the countries where they do business.
- In principle to ratify a global minimum corporate tax rate to counter the possibility of countries undercutting each other to attract investments.
Countries involved: US, the UK, Germany, France, Canada, Italy and Japan
Decisions taken :
- Force multinationals to pay taxes where they operate
- The agreement commits states to a global minimum corporate tax rate of 15% to avoid countries undercutting each other
- Reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises.