News | Legal News

07 June 2021

G7 agree to global minimum corporate tax rate of 15%

The G7 finance ministers from some of the world’s most advanced economies have agreed to tackle tax avoidance and make multinational companies pay more tax in the countries where they do business.

The G7 group, which includes the US, UK, France, Germany, Canada, Italy and Japan, plus the EU, has also agreed to a global minimum corporate tax rate of 15%, to prevent markets from undercutting one another.

The deal could help governments to pay off debts sustained during the pandemic and it is likely to put pressure on other countries including China, Russia and Brazil, to do the same.

UK Chancellor of the Exchequer Rishi Sunak said the agreement would make the global tax system "fit for the global digital age".

US Treasury Secretary Janet Yellen said that the global minimum tax system, “will end the race to the bottom in corporate taxation and ensure fairness for the middle class and working people in the US around the world".

Olaf Scholz, Germany’s federal minister of Finance added, "Companies will no longer be in a position to dodge their tax obligations by booking their profits in lowest-tax countries.”

In response Facebook said the deal was a "significant first step towards certainty for businesses and strengthening public confidence in the global tax system".

A spokesperson for Google said: "We strongly support the work being done to update international tax rules. We hope countries continue to work together to ensure a balanced and durable agreement will be finalised soon."

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Alex Zachary

Alex Zachary

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Beth Miel

Beth Miel

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