Rich nations confident of reaching G7 tech tax deal

·2-min read

G7 finance ministers are “confident” of reaching a deal on taxing multinational companies at their meeting in London.

The agreement, which is expected to include a global minimum rate of corporation tax, would target tech giants such as Amazon, Apple and Microsoft.

German finance minister Olaf Scholz told the BBC that the deal would "change the world".

He said a 15 per cent rate would help repay debts that have swelled during the pandemic - and that he was "absolutely confident" there would be an agreement.

"If we agree on the minimum taxation for corporates, this will help to go out of this race to the bottom we see with taxes today," he said.

"And this will help the countries we live in to finance their tasks, and - especially after Covid crisis and all the money we spent - to defend the health of the people, and to defend the economy."

French finance minister Bruno le Maire urged Ireland, which has one of the lowest corporate tax rates in the European Union, at 12.5 per cent, to get "on board".

He told the broadcaster: "European countries, that in the past, opposed this new international tax system, must understand that they have to give the agreement to this major breakthrough".

During the G7 finance ministers meeting on Friday, Chancellor Rishi Sunak said that securing a global agreement on digital taxation was a “key priority this year”.

The Chancellor said the group, which also consists of members from Japan, Canada, Italy and France, wanted “companies to pay the right amount of tax in the right place” and that he hoped an agreement could be reached at the first face-to-face meeting since 2019 due to coronavirus restrictions.

It has been suggested that the band of ministers want companies to pay taxes based on where their sales are, and not mainly where they have their operation, such as factories.

Mr Sunak is due to speak to the media on Saturday afternoon, by which point it is likely to be known whether a deal has been struck.

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