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The Group of Seven (G7) is approaching a corporate tax treaty for multinational companies, paving the way for global transactions later this year, creating new rules for the collection of taxes on the world’s largest companies.
After high-level officials have made progress in recent days, the G7 agreement can be signed as early as Friday, which will become a powerful force and a powerful force to reach an agreement in the formal negotiations held in the Paris OECD under the guidance of the broader G20. premise.
An OECD agreement may lead to the largest international restructuring Company tax For a century, this has severely limited the company’s ability to transfer profits to low-tax jurisdictions and ensured that American digital giants pay more taxes in the countries where they sell.
Under the leadership of the Biden administration, the United States has been working hard to push the Group of Seven countries to reach its own consensus to stimulate negotiations in the OECD in order to reach a final agreement in the next few months.
This we Last week, the company scaled back its ambitions for the world’s lowest corporate tax rate, reducing its effective tax rate from 21% to 15% to increase its international appeal.
It also assured other countries that its proposal was serious, allowing a portion of the global profits of the largest multinational companies to be taxed based on the location of sale, and that the two “pillars” of the deal were inseparable.
In recent weeks, the United States has become more and more confident to include most of the G7 plans in its plans, which are based on the blueprint drawn up by the OECD last year. Germany and Italy have always been staunch supporters of the world’s lowest tax rate. Italian Finance Minister Daniele Franco, chairman of the Group of Twenty (G20), said on Friday that the latest US proposal is “another important step” and that the prospects for reaching a global agreement on international tax reform “are currently specific”.
France and the United Kingdom pay more attention to taxation locations. International officials called Britain “difficult” in the negotiations. But in London, ministers and officials insisted that they wanted to ensure that both elements of the transaction were given priority, and that the US government took the initiative to change the location of corporate tax payments through Congress seriously.
British officials said over the weekend that their position has not changed, but those close to the negotiations said that in the past week, some consensus has emerged, and that there is a high possibility that an agreement will be reached initially at the G7 summit.
The G7 did not play a formal role in this process, but countries such as the United States, Japan, Germany, the United Kingdom, France, Italy, and Canada all have strong powers in other forums. Officials said the organization held a virtual meeting of finance ministers on Friday and held a face-to-face meeting in London from June 4 to 5 to agree on the main content of the transaction.
If an agreement can be reached informally by the finance ministers, the leaders of the Group of Seven countries can formally sign the agreement at the Cornwall summit on June 11-13, and conduct a report to 139 OECD countries within the “inclusive framework” The negotiating country proposes a plan.
US national security adviser Jake Sullivan said on Twitter on Saturday: “People are becoming more and more interested in the possibility of a global corporate tax deal.” The world is closer than ever to the lowest global tax rate. I am very happy to hear that our proposal has been actively accepted, and thank Secretary Yellen and our partners around the world for their work in this regard. This is the bottom line to lead the world to end this race. “
The G20 stated that it hopes to reach an agreement in the summer. The progress of the G7 makes this ambitious timetable still feasible, although the officials who talked with it agreed that October is likely to reach a complete international agreement. It is a more realistic date.
Countries with lower corporate tax rates have not yet agreed. Irish Treasurer Paschal Donohoe (Paschal Donohoe) emphasized that smaller countries need to be able to continue to use taxation as a competitive tool.
The Irish Treasury Department stated on Monday that “key decisions have not yet been discussed at the political level among the 139 finance ministers within the EU. [OECD] Inclusive framework, including implementation timetable and legal basis [for the proposals]”.
Additional reporting by Laura Noonan in Dublin
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