The Group of Seven (G7) wants the minimum tax rate to be 15 percent for businesses

The Group of Seven (G7) wants the minimum tax rate to be 15 percent for businesses

The Group of Seven, a grouping of seven major economies, wants a minimum global corporate tax rate of 15 percent. The G7 finance ministers reached agreement on this at a meeting in London.

US President Biden recently proposed a global harmonization of tax rates. This agreement is an effect of that. The G7 consists of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

rest of the world

The plan is to discuss the minimum rate in more detail at the G7 summit of government leaders at the end of next week. In order to get the rest of the world behind after the G7, it should also come at the G20 summit later this year. The Organization for Economic Co-operation and Development (OECD), which has 36 member states, must also agree.

If such a global rate is introduced, it will be difficult for companies to avoid taxes through tax havens. This could generate many billions of additional tax revenue worldwide. “After years of debate, we have reached a historic agreement to adapt the global tax system to the global digital age,” said British Chancellor of the Exchequer Sunak. The plan is expected to mean that tech giants like Facebook and Google will also have to pay more taxes.

The outgoing Cabinet is pleased with the agreement. “The Netherlands supports plans for minimum taxation around the world,” Foreign Minister Vigelbrev said of finances in response. “This way we can effectively tackle tax evasion.” Earlier this week he said in BV . News That if companies start paying more taxes, citizens may be taxed less.

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The G7 countries themselves already have a corporate tax rate of 15 percent or more. But some EU countries are now even lower, such as Hungary with 9 per cent and Ireland and Cyprus with 12.5 per cent. Cyprus Finance Minister Petrides recently said he believes tax rates should remain an individual choice for countries. It remains to be seen whether the EU will unanimously support the plan.

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