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Major major economies will agree on a joint stance on taxing multinational corporations on Saturday to end a three-decade race in corporate taxation that would give governments around the world additional revenue.
The finance minister of the G7 nations group was still discussing the details of the deal on Friday at a London meeting organized by UK Chancellor Rishi Sunak.
Representatives at the meeting said the G7 would agree in principle to change the basis of international corporate tax law for the first time in a century. The historic plan aims to force the world’s largest companies to pay more taxes in the countries where they do business, not just in places with headquarters.
German Finance Minister Olaf Scholz has told the BBC that he is “absolutely confident” that the ministers will reach an agreement. “We will have an agreement that will really change the world,” he said.
French Finance Minister Bruno Le Maire has said the minister is on the verge of reaching a “historic deal” that will show the world that the G7 is still a global force to determine the rules of the game in the 21st century. In the international order of the century.
A person closely associated with the negotiations said they expect “very good communication” when the talks end on Saturday.
Countries have been negotiating to seek an international tax deal since 2013. The OECD talks left the U.S. and European countries in the lurch, mostly because of the taxation of large U.S. tech companies, but hopes for a deal rose sharply after Joe Biden replaced Donald Trump. this year as president of the United States and presented new proposals.
The G7 finance ministers are expected to release a statement on Saturday, outlining their new common position and calling on the Biden administration to call for a global regime and a minimum global rate for the world’s largest companies.
Among the unresolved issues are whether the minimum general tax would be at the rate of 15 percent proposed by the U.S., or whether it should be defined as “at least 15 percent,” according to someone involved.
Two people familiar with the talks said the US was pushing for “tough negotiations” to ask when the UK, France and Italy should reach an agreement when they need to remove digital taxes.
The US wants it to be immediate, but France and the UK believe this is not the trigger, that digital giants would be allowed to pay less tax than they are now based on the US commitment to implement the deal, but it was passed in Congress before the law was passed.
“We hope to reach an agreement, but the details are completely balanced,” said one person involved.
The UK Treasury said there had been “progress”, but Sunak’s allies said there were still points where companies would be held accountable and how much impact they would have on their global profits.
The U.S., meanwhile, wants a global minimum rate that will prevent its technology giants from taking profits to low-tax jurisdictions.
A large portion of the tax earned is likely to come from U.S. companies, so the person in question said U.S. Treasury Secretary Janet Yellen was “negotiating hard.”
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