G7 nations ‘one millimetre away’ from agreement on global tax deal - CityAM

The G7 nations are close to agreeing a historic global taxation deal after finance ministers met for the first time today.

Finance ministers from the countries met for the first time since the start of the pandemic with plans to close the net on large corporates which do not pay their fair share of tax top of the agenda.

Before the meeting today, Sunak said securing a global agreement on digital taxation has been a “key priority”.

“We want companies to pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners,” he added.

“We are just one millimetre away from a historic agreement,” French finance minister Bruneo Le Maire told the BBC today.

But disagreements still remain. The US has proposed a minimum corporation tax rate of 15 per cent, which is well below the average in the G7.

Le Mare said the 15 per cent rate presented “only a starting point”.

“We need something that is credible,” he added. “We are still working on this very tricky point of the rate.”

German finance minister Olaf Scholz echoed this sentiment, saying he is confident the groupof seven will come to an agreement “today or tomorrow” which will “end the race to bottom on taxation”.

The plan would focus on the profits of the 100 biggest companies that have benefitted most from globalisation, chief among them tech giants, which have seen their businesses boom during the pandemic.

However, this could be offset by the minimum corporation tax rate Biden wants to implement, which may result in more companies paying tax in the US instead of other countries.

Biden showed today how serious he was about getting a deal done as he slapped tariffs on six countries, including on £626m goods made in the UK.