G7 backs Biden’s sweeping overhaul of global tax system

Daily US Times: G7 finance ministers agreed to back a global minimum tax of at least 15% on multinational companies. The G7 (Group of Seven) group also agreed on Saturday that the biggest companies should pay tax where they generate sales, and not just where they have a physical presence.

In a video posted on Twitter Saturday, UK finance minister Rishi Sunak announced the agreement, saying G7 finance ministers — hailing from Canada, Italy, Japan, France, Germany the UK and the US — had “reached a historic agreement for a global tax reform system to make it fit for the global digital age and, crucially, to make sure that it is fair so that the right companies pay the right tax in the right places.”

The agreement was made during a G7 finance ministers’ meeting in London, attended by US Treasury Secretary Janet Yellen where she sought backing for the Biden administration’s efforts to rewrite international tax rules and discourage American companies from booking earnings abroad.

On Saturday, Janet Yellen said that the agreement was a “significant, unprecedented commitment,” from the world’s richest economies aimed at preventing companies from avoiding taxes by shifting profits overseas.

In the statement, Yellen wrote: “The G7 Finance Ministers have made a significant, unprecedented commitment today that provides tremendous momentum towards achieving a robust global minimum tax at a rate of at least 15%.”

The US Treasury Secretary said in a statement that global minimum tax would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the United States and around the world,” adding that the tax would also level “the playing field for businesses and encouraging countries to compete on positive bases, such as educating and training our work forces and investing in research and development and infrastructure.”

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