The leaders of the Group of Seven nations today supported the global tax reform bill approved by their finance ministers last Saturday, which aims to establish a minimum tax rate to deal with tax competition among nations.
According to the final statement of the three-day G7 summit in Cornwall (South East England), they support a “fairer tax system” and “end the screed on the bottom”.
Last weekend, the G7 member countries reached an agreement on global tax reform. The minimum tax rate for companies is expected to be 15%. Multinational companies pay taxes in the countries where they earn income and profits, not just where they are located.
The meeting was held in a 19th-century mansion near Buckingham Palace. This was the first time G7 finance ministers met face-to-face since the beginning of the covid-19 pandemic.
The new paradigm being designed combines the application of the lowest global tax rate for large companies with the payment of taxes in the country where the income is obtained (regardless of where they are located). These are the two pillars of the work. The Organization for Economic Cooperation and Development (OECD) The past few years have been fighting base erosion and profit shifting (BEPS).
In this range, it is suitable for technology giants such as Google, Amazon and Facebook.
According to a study released by the EU’s New Fiscal Observatory last week, if Portugal imposes a 15% tax on the profits of multinational companies, it could collect 100 million euros this year, while the EU will receive more than 48 billion euros. As far as the United States is concerned, 40.7 billion euros will be charged.
The agreement reached by the G7 (the United States, Japan, Germany, the United Kingdom, France, Italy, and Canada) was a step forward when the G7 met in Venice in July.