France, Germany, Italy, Spain on verge of G7 deal to tax multinationals

Rishi Sunak on the eve of the G7 finance ministers meeting in London on Thursday

Under the deal, reached during a G7 finance ministers meeting in London, members agreed to set a minimum 15 percent global corporate tax threshold, a step they say will force companies to pay taxes in the countries where they generate their business, instead of siphoning profits offshore to tax havens.

"After years of discussion, G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age", British Chancellor of the Exchequer Rishi Sunak told reporters at the meeting.

Leaders of the seven countries will hold their annual meetings June 11-13 in Carbis Bay, Cornwall, at England's southwestern tip.

A spokeswoman said: "Under pillar one of this historic agreement, the largest and most profitable multinationals will be required to pay tax in the countries where they operate - and not just where they have their headquarters". The changes, if enacted, would have particular impact on the world's leading tech companies, such as Amazon and Google, which have long succeeded in avoiding taxation in numerous jurisdictions where they operate. An I believe they have high expectations for what we all can agree over the coming days.

The Chancellor has hailed a "historic" decision by G7 countries to agree a global base rate of corporation tax and reforms to the tax system aimed at targeting online tech giants.

According to a draft communique seen by AFP, ministers also plan to commit to "sustain policy support", or stimulus, for "as long as necessary" to nurture economic recovery, while addressing climate change and inequalities in society.

It additionally said it will continue to support "the poorest and most vulnerable countries as they address health and economic challenges associated with Covid-19".

The thorny topic of the regulation of digital currencies such as bitcoin will also be on the agenda.

Among the G-7 nations, Japan, France and Germany supported the USA proposal.

German Finance Minister Olaf Scholz said he was "absolutely confident" that there would be an agreement by the time the meeting finishes on Saturday.

U.S. Treasury Secretary Janet Yellen, who attended the London meetings, said the agreement "provides tremendous momentum" towards reaching a global deal that "would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world".

Agencies " These seismic tax reforms are something the United Kingdom has been pushing for and a huge prize for the British taxpayer - creating a fairer tax system fit for the 21st century", said Sunak. "Now it's time to come to an agreement".

London is hosting the meeting because Britain now holds the G-7´s rotating presidency.

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

The news comes as official data showed Ireland's economy grew nearly 8% in the first quarter of 2021, during a harsh lockdown when most shops closed, as multinational firms' revenues helped it continue to buck pandemic downturn trends.

- commit to a global minimum tax of at least 15 percent on a country by country basis.

"A rate of 15 percent would in our opinion be largely insufficient", Oxfam France's senior policy officer Quentin Parrinello said.

But major disagreements do remain on both the minimum rate at which companies should be taxed, and on how the rules will be drawn up to ensure that very large companies with lower profit margins, such as Amazon, face higher taxes.

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