The G7 countries have agreed to endorse a worldwide corporate minimum tax
The G7 countries declared that they had reached an agreement to impose a worldwide tax rate of 15% on major multinational firms. Finance ministers from the United States, the United Kingdom, Canada, France, Japan, Germany, and Italy convened in London to examine the long-debated issue of global taxes.
As part of the agreement, the United States committed to reducing its taxes on foreign company activity. The United States has imposed levies on the activity of internet corporations in European countries. European governments have been constrained in their taxation of some of these corporations under present tax regimes, and have criticized it as unjust that such corporations have been allowed to collect money in their countries without being taxed.
Tariffs on various nations for new digital services taxes were recently levied and then promptly cancelled by the United States. In retaliation for their digital services taxes, US Trade Representative Katherine Tai announced fresh duties on Austria, the United Kingdom, India, Italy, Spain, and Turkey.
The G7 accord could aid in the resolution of trade disputes arising from disagreements about how to tax internet businesses and other multinational corporations that have hitherto been able to benefit from low worldwide tax rates.
This agreement excludes well-known corporate tax havens such as Ireland. Ireland's finance minister declared that the country's corporation tax rate of 12.5 per cent will be maintained for the foreseeable future.