G7: Rich Nations Back Deal To Tax Multinationals

G7: Rich Nations Back Deal To Tax Multinationals

The G7 group of advanced economies has reached a "historic" deal on taxing multinational companies.

Andrew H. Sweet
Andrew H. Sweet
  • They agreed in principle to a global minimum corporate tax rate of 15% to avoid countries undercutting each other.
  • The G7 will aim to make companies pay more tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits.
  • It was reported this week that an Irish subsidiary of Microsoft had paid zero corporation tax on $315bn (£222bn) profit last year because it was resident in Bermuda for tax purposes.
  • The deal announced between the US, the UK, France, Germany, Canada, Italy, and Japan, plus the EU, could see billions of dollars flow to governments to pay off debts incurred during the Covid crisis.
  • The tax would apply to global companies with at least a 10% profit margin. Twenty percent of any profit above that would be reallocated and taxed in the countries where they operate, according to the G7 communiqué.

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