The top seven economies are close to agreeing on international corporate taxes, paving the way for international agreements by the end of the year to create new investment rules for the world’s largest corporations.
The G7 agreement could be unveiled on Friday after a series of high-profile developments in recent days – and could be a key step in securing talks at the OECD in Paris and under the auspices of the G20 summit.
The OECD alliance could lead to a major global upheaval corporate taxes for a century, it has hindered the ability of companies to transfer profits to less tax havens and to ensure that US digital giants pay higher taxes in the countries they sell.
Under Biden’s leadership, the US pushed for the G7 to reach its agreement as a way to boost OECD negotiations so that a final agreement could be reached in the coming months.
The program of US last week it reduced its demands on global taxes, lowering from 21% to 15% increase over its global rise.
It also reassured other countries that it was large in their contribution to allow for a portion of the global profits of the largest countries to be taxed based on the point of sale, and the two “pillars” were inconsistent.
In recent weeks, the US has become increasingly confident that it has the G7 majority in the company and its plans, built on the guidelines set by the OECD last year. Germany and Italy have been supportive of international taxes. Daniele Franco, Italy’s finance minister, who heads the G20, said on Friday that the recent idea in the United States was “another important component” and the prospect of international cooperation in changing the global tax system “is now concrete”.
France and the UK are heavily burdened with taxes. Officials around the world report that the UK has been “difficult” to negotiate. But in London, cabinet and supervisors insist they want to ensure that all aspects of the agreement are put forward and that the US administration is instrumental in promoting these corporate tax reforms through Congress.
Officials in the UK said over the weekend that their views had not changed, but those close to the talks said last week there was a meeting of ideas and agreements, initially at the G7, which seems to be looking good.
The G7 has no role to play in this process, but the US, Japan, Germany, the UK, France, Italy and Canada form strong corporations. The group is holding a meeting of finance ministers on Friday and a face-to-face meeting on June 4 and 5 in London, officials said.
If the agreement is reached amicably approved by the finance minister, G7 leaders can sign a summit of Cornwall on June 11 to 13, and provide a framework for 139 countries negotiating under “inclusive principles” at the OECD.
To highlight the growing global tax opportunities, Jake Sullivan, US security adviser, on Saturday wrote: “The world is closer than ever to the world’s smallest taxes. This is how it seems to lead the world to the finish line. ”
The G20 has said it wants to make a deal in the summer and progress in the G7 makes it possible for a better time, although officials close to the talks think October could be a real day for global cooperation.
Countries with lower taxes did not sign the treaty. Irish Finance Minister Paschal Donohoe reiterated that small countries should continue to use taxes as a tool for competition.
Ireland’s finance ministry announced on Monday that “major elections have not been held politically by 139 ministers of finance. [OECD] an integrated system, including the installation time and basis for approval [for the proposals]”.
Additional reports of Laura Noonan in Dublin