The G7 finance ministers met this Friday in London, in the first of two days of meetings, with an agreement “in sight” on the establishment of a global minimum tax on large multinationals, backed by the United States.
It is the first time since the start of the pandemic that the finance heads of the seven major economies have met in person, just a week before the G7 summit of heads of state and government in Cornwall, south-west England.
“There are high expectations that we can reach an agreement” on corporate tax, said Britain’s Rishi Sunak at the opening of the meeting. “In a complex, global and digital economy, we cannot continue to rely on a tax system that was largely designed in the 1920s,” he said.
The issue of a global minimum corporate tax, the “pillar” of a vast tax reform carried out by the Organization for Economic Cooperation and Development (OECD), was high on the agenda.
Countries like the United Kingdom also ask to tax the profits of large multinationals, in particular digital giants, in the country where they obtain their profits and not only where their headquarters are registered.
The finance ministers of the four largest economies of the European Union – Germany, France, Italy and Spain, which is not a member of the G7 – stated in an article published in several European newspapers that they would defend a common position on the matter.
The Spanish Nadia Calviño, the German Olaf Scholz, the French Bruno Le Maire and the Italian Daniele Franco promised to “establish a common position on a new international tax system” and highlighted the current “opportunity” to “achieve a historic agreement.”
These multinational companies, “like the others, have to pay fair taxes, consistent with their success, to finance public goods,” they add on the rostrum.
Biden’s momentum
The Guardian newspaper gave as an example the Irish subsidiary of Microsoft, which did not pay any corporate tax last year because it is registered in Bermuda, despite having a profit of 315,000 million dollars.
Listens
For the G7, it is about responding to the “strategies to avoid taxes” of certain companies, underlines a source close to the negotiations, according to which there has never been “so close to an agreement” in this regard.
The project, launched a few years ago, is now driven by the arrival in the White House of Democrat Joe Biden, more favorable to multilateralism than his predecessor, Republican Donald Trump.
Furthermore, Americans, like many other countries, are seeking new resources to fuel their public finances, drained by the pandemic.
The Biden administration initially hinted at a minimum corporate tax rate of 21%, before changing its mind and lowering it to 15%.
However, for diplomatic reasons, the announcement of the formal agreement could have to wait for the next meeting of the G20 finance ministers in Venice in July, before its validation by the OECD countries.
Overcome reluctance
Faced with countries that have already expressed their opposition, such as Ireland and Hungary, whose corporate taxes are particularly low, the G7 countries have an international bargaining force that could overcome these reluctance.
According to a draft final declaration to which the AFP had access, the United States, Canada, the United Kingdom, Germany, France, Italy and Japan must also commit to “maintaining support policies” for their economies, especially in the face of new variants of the virus. that could threaten recovery.
The G7 will also reiterate the promises of aid to developing countries, especially to obtain vaccines against COVID-19.
The fight against climate change featured prominently on Friday.
“The transition to carbon neutrality will be one of the economic elements that will define the next decade and transform our future societies. We have to begin the practical and tangible work of making that transition a reality,” said Sunak at the end of the first day of meetings. .
In addition, he called on other countries to follow the British approach of forcing companies to disclose information about their climate impact and to take measures to tackle crimes against the environment.
