Group of Seven rich nations agreed on Saturday to commit to a global minimum tax of at least 15% on a country by country basis.
“We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises,” a communique from G7 finance ministers said.
“We will provide for appropriate coordination between the application of the new international tax rules and the removal of all Digital Services Taxes, and other relevant similar measures, on all companies.”
Below are reactions:
RISHI SUNAK, UK FINANCE MINISTER AND MEETING HOST
“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.”
Asked for an estimate of how much the agreement could raise for Britain, Sunak replied: “This is the first step, this is agreement reached at the G7, we still have to go to the G20 and reach agreement with a broader group of countries so it’s hard to say where the final deal will land.”
JANET YELLEN, U.S. TREASURY SECRETARY
“The G7 Finance Ministers have made a significant, unprecedented commitment today that provides tremendous momentum towards achieving a robust global minimum tax at a rate of at least 15%.
“That global minimum tax 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.
“The global minimum tax would also help the global economy thrive, by levelling the playing field for businesses and encouraging countries to compete on positive bases, such as educating and training our work forces and investing in research and development and infrastructure.”
OLAF SCHOLZ, GERMAN FINANCE MINISTER
“The seven most important industrial nations have today backed the concept of minimum taxation for companies. That is very good news for tax justice and solidarity and bad news for tax havens around the world.
“Companies will no longer be in a position to dodge their tax obligations by booking their profits in lowest-tax countries. Stable tax revenues are important for making sure states can carry out their duties. This will be even more urgent after the coronavirus pandemic.”
BRUNO LE MAIRE, FRENCH FINANCE MINISTER
“This is a starting point and in the coming months we will fight to ensure that this minimum corporate tax rate is as high as possible.”
PASCHAL DONOHOE, IRISH FINANCE MINISTER
“It is in everyone’s interest to achieve a sustainable, ambitious and equitable agreement on the international tax architecture. (Ireland has a tax rate of 12.5% rate).
“I look forward now to engaging in the discussions at OECD. There are 139 countries at the table, and any agreement will have to meet the needs of small and large countries, developed and developing.”