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Global tax reform deal will take time, negotiation and cooperation

Britain’s Chancellor of the Exchequer Rishi Sunak (R) welcomes US Treasury Secretary Janet Yellen to the G7 Finance Ministers Meeting at Lancaster House, central London on June 4, 2021.

STEVE REIGATE | AFP | Getty Images

Group of Seven finance ministers might be congratulating themselves on their deal to agree to a 15% minimum global corporate tax rate, but they’re already facing criticism that it doesn’t go far enough and will take much more time, coordination and cooperation to conclude.

G-7 ministers hailed the deal, agreed in principle this past weekend, as a milestone in global cooperation on corporation tax after years of discord over the matter, particularly over the taxation of large multinationals, especially tech giants.

As it stands, the agreement involves only the G-7 members — Canada, France, Germany, Italy, Japan, the U.K., U.S. and the EU — and faces much deeper and likely protracted negotiations.

U.K. Finance Minister Rishi Sunak, who hosted his fellow G-7 ministers for talks in London, said Saturday the ministers had “reached a historic agreement to reform the global tax system, to make it fit for the global digital age — and crucially to make sure that it’s fair so that the right companies pay the right tax in the right places.”

U.S. Treasury Secretary Janet Yellen said a global minimum rate would end “the race-to-the-bottom in corporate taxation.”

The agreement will be discussed further at a Group of 20 meeting next month and comes just days before a meeting of leaders of G-7 countries that begins on Friday.

While the finance ministers leading the world’s most advanced economies might have lauded the deal, many experts are not so impressed and say the 15% minimum tax rate is not ambitious enough, and tricky to implement.

The beginning of a long road

Years to conclude?

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Global tax reform deal will take time, negotiation and cooperation

2021-06-07 08:46:47

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