LONDON: Finance ministers from the Group of Seven major industrial nations said Saturday that they have agreed to set the corporate tax rate at 15 pct or higher globally.
The G-7 countries “commit to a global minimum tax of at least 15 pct on a country-by-country basis,” the ministers said in a joint statement issued after a two-day in-person meeting in London.
The seven countries’ commitment adds momentum to the effort of the Group of 20 economies to reach agreement on a minimum tax rate at a meeting next month. A G-20 agreement on the matter is expected to help curb tax competition among countries.
“The agreement is significant,” Japanese Finance Minister Taro Aso told a news conference after the G-7 meeting.
The ministers also agreed to award taxing rights on at least 20 pct of profit exceeding a 10 pct margin for the largest and most profitable multinational enterprises to market countries, according to the joint statement.
The move is expected to affect about 100 such enterprises, including U.S. technology giants, sources familiar with the matter said.
The statement also said the G-7 countries “commit to sustain policy support as long as necessary” to ensure a strong, sustainable, balanced and inclusive global recovery from the COVID-19 pandemic.
“Once the recovery is firmly established, we need to ensure the long-term sustainability of public finances to enable us to respond to future crises and address longer-term structural challenges,” the ministers said.
Aso said, “We issued a powerful message that the G-7 nations will work together to lead the global economy.”
Referring to the G-7 nations’ response to climate change, the ministers said they support a move toward mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants.
On central bank digital currencies, the ministers said they will work on common principles and “publish conclusions later in the year.”