The G7 reaches a “historic” agreement for a 15% tax on multinationals

Spain, Italy, France and Germany defend a minimum universal tax of 15% on companies after the US proposal before the G7

The G7 (a group made up of Canada, the United States, Japan, France, Germany, Italy and the United Kingdom) has reached a historic agreement for the introduction of a minimum corporation tax of 15% for multinationals in all countries. 

What has been agreed? 

The statement published by the different G7 member countries consists of 20 points divided into four blocks: “build a strong, sustainable and balanced global economic recovery “, carry out a “transformative effort to face climate change and the loss of biodiversity”, ” continue to support low-income and vulnerable countries ”and“ forge a secure and prosperous future for all ”.

It is in this last section that the new taxes that will be applied to multinationals to achieve a new global taxation are indicated:

  • The establishment of a minimum corporate tax of “at least 15% in each country.”
  • The obligation to pay at least 20% of their profits in the countries where they operate to the “largest and most profitable multinationals” that obtain a profit margin of more than 10%

Who would be affected by the tax?

The reform may affect technology giants such as Apple, Google and Facebook , since at the moment large companies can establish headquarters in countries with a relatively low rate of companies and declare taxes on their profits there, even if they came from sales made in other places.

What reactions have there been?

The president of Spain, Pedro Sánchez , has reacted on social networks to this G7 agreement, assuring that it is something “historic” and a step towards “a new tax system for the global digital era.”

Rishi Sunak , Chancellor of the Exchequer of the United Kingdom, has insisted that this agreement will make it possible for “the right companies to pay the right taxes in the right places .” 

For his part, the Federal Minister of Finance of Germany, Olaf Scholz , commented that this agreement “is very good news for tax justice and solidarity, and bad news for tax havens around the world.” 

French Finance Minister Bruno Le Maire tweeted that the G7 countries responded to the “challenge” at this “historic moment” by agreeing on the main principles for a new international tax system that “will make it possible to tax the digital giants and, therefore, for the first time, implement a minimum corporate rate ”.

The vice president of Global Affairs of Facebook, Nick Clegg , has also reacted to this agreement assuring that “Facebook has long called for the reform of global tax rules” and that they hope this process will be successful , although it may mean that Facebook will pay more taxes.

Ursula von der Leyen, president of the European Commission, has assured that the G7 agreement on new taxes for multinationals “is a great step towards equity and equal conditions “.

When will this tax take effect? 

This agreement, as different ministers have remarked, is a first step towards achieving international tax justice. 

The next step is to present this agreement at the next G20 summit, to be held in Venice in July, and to seek a consensus with these countries.

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