Breakthrough in global talks over taxing giant corporations

Joe Biden

The G7 nations are moving closer to an agreement on reforming the way in which the world’s multinationals are taxed, but Britain is said to be holding out for a specific clampdown on giant technology companies

An initial deal would set a minimum level of tax on company profits around the world and would help to stamp out “profit shifting”, the practice of declaring profits in lowest-tax jurisdictions.

The breakthrough, reported by the Financial Times, came after the United States agreed to accept a minimum rate of at least 15 per cent last week, having insisted on 21 per cent previously.

France, Germany and Italy said that the new proposal was a basis for sealing a deal by July. However, while Britain welcomed America’s commitment to finding a solution, it did not comment specifically on the proposal.

Last night The Daily Telegraph reported sources as saying that Britain was “not going to rush to sign up”Sunak under pressure to back Biden’s global corporation tax plan as the government was pushing for strict rules that specifically target the big Silicon Valley technology companies.

“The world is closer than ever before to a global minimum tax,” Jake Sullivan, the US national security adviser, said on Saturday.

A G7 pact could be sealed by Friday. It would be a powerful force and a prerequisite for a deal in the formal negotiations taking place at the Organisation for Economic Co-operation and Development in Paris and directed by the wider G20.

If a deal could be agreed informally by finance ministers this week, G7 leaders could formally sign it off at the Cornwall summit next month.