G7 bloc reached historic agreement on multinational corporate tax

G7 bloc reached historic agreement on multinational corporate tax


The group of countries with the most developed economies, known as the G7 for short, has just reached a historic agreement to combat tax evasion by multinational corporations.

“After years of discussions, the G7 finance ministers today reached a historic agreement to reform the tax system globally, in line with the digital age,” said UK Finance Minister Rishi Sunak. It’s important to make sure the right companies pay the right amount of tax in the right places.”

Finance ministers of G7 countries in the first face-to-face meeting in the UK. Photo: AP

CNBC reported, G7 ministers agreed to impose a minimum tax rate of 15% on multinational corporations, and introduced many measures to ensure that the tax amount will be paid in other countries. have branches of these enterprises.

The agreement, signed in London, England on June 5, is intended to end the situation where many countries compete with each other to attract multinational corporations with low taxes and many other exemptions. . That has cost these countries hundreds of billions of dollars in budgets, the money they now desperately need to support their economies that are falling into recession due to the Covid-19 epidemic.

The newly reached agreement does not specify which businesses the G7 tax rules will apply to, but only refers to “the largest and most profitable multinational enterprises”. According to some sources, leading technology corporations such as Amazon, Google and Facebook will be among the subjects of the tax.

A Facebook representative said the company “welcomes this important step”. Nick Glegg, Facebook’s vice president of global affairs, wrote on Twitter that this “will help Facebook get paid a lot in taxes in many places”. The Google side also gave a response in support of the G7’s new tax agreement.

The administration of US President Joe Biden initially proposed a minimum tax of 21% on multinational corporations, in an effort to end the “race to the bottom” among many other countries in attracting corporations. this group.

The G7 leaders hope that the agreement by the end of this year will be supported by the group of G20 countries, which includes China, Russia, South Africa, and Saudi Arabia.

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