Published on: June 1, 2021

G7 TAX DEAL

G7 TAX DEAL

Khasavyurt 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.

Bègles Aim :

  • 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.