The Strategist

G7 countries approve corporate tax of at least 15%

06/07/2021 - 03:49

G7 finance ministers are in favour of introducing a corporate tax of at least 15 per cent on profits of large corporations. The ministers reached an agreement on this issue following a meeting in London, British Finance Minister Rishi Sunak said. The introduction of this tax was earlier initiated by the US.

"After years of discussions, G7 finance ministers have reached a historic agreement to reform the global tax system to match the digital age," Mr. Sunak told reporters (quoted by Reuters).

The minister revealed on Twitter that taxes would be paid by the world's largest companies with a profitability of at least 10%: 20% of any income above 10% would be redistributed and then taxed in the countries where the sales take place. "The G7 have also agreed to a global corporate tax principle for large companies of at least 15% for each country, which will create a more level playing field for UK firms and help avoid tax avoidance," wrote Rishi Sunak.

According to Reuters, citing a copy of the document agreed by the ministers, the G7 countries have also agreed to oblige companies to disclose their environmental impact. This will make it easier for investors to decide whether to fund them.

In April, the US Department of the Treasury unveiled a plan for corporate tax reform. Head of the department Janet Yellen said that introducing a common minimum corporate tax rate for all countries would "offset any adverse effects" that a proposal to raise corporation tax in the US might have.