French Finance Minister Bruno Le Maire called on the G7 to support a comprehensive agreement on a digital tax and a minimum tax rate.
The Group of Seven finance ministers are closing in on an agreement to push for a minimum corporate rate of “at least 15%” in international tax negotiations, as proposed by the United States late last month, according to people familiar with the matter. .
The ministers will meet this Friday and Saturday in London and are due to issue a statement after the discussions. Such a deal would be one of two parts of a broader pact that countries are trying to reach that will also cover how to split taxes on some of the largest multinational companies like Facebook and Amazon.
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Agreeing to the wording of “at least” would leave room for maneuver in talks involving some 140 nations on how to rework global rules to prevent multinational companies from shifting their profits to low-tax jurisdictions. It would also give the United States some leeway for talks about its own national legislation.
European ministers had already described US Treasury Secretary Janet Yellen’s proposal – less than the 21% initially proposed by the Biden Administration – as a good consensus. It is not yet clear whether a specific rate would be included in the G7 statement to be released on Saturday.
The tax rate is just one part of the broader challenge facing finance ministers. The global talks, which are being held under the auspices of the Organization for Economic Cooperation and Development, also address the more sensitive issue of how to divide among nations the right to tax the largest multinationals.
European governments, under internal political pressure, have always insisted that those rules should target digital companies like Google and Amazon. But the US has insisted that companies, which are mainly American, should not be singled out in a new regulation.
The UK said in a statement on Friday that finance ministers held “productive negotiations on reforming the global tax system and addressing the fiscal challenges that arise in a complex digital global economy.”
Arriving at the G7 meeting, French Finance Minister Bruno Le Maire called on the G7 to support a comprehensive agreement on a digital tax and a minimum tax rate.
A G7 deal would help build momentum ahead of a meeting of G20 finance representatives in July and the G20 summit in October.
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