The G7 group of advanced economies has reached a “historic” deal to make multinational companies pay more tax.
Finance ministers from G7 countries meeting in London have reached a consensus to battle tax avoidance by making companies pay more in the countries where they do business.
They also agreed, in principle, to a global minimum corporate tax rate of 15% to avoid countries undercutting each other.
The deal announced on Saturday, between the US, the UK, France, Germany, Canada, Italy, and Japan, plus the EU, could see billions of dollars flow to governments to pay off debts incurred during the Covid crisis.
Negotiated over several years, it will also put pressure on other countries to follow suit, notably G20 nations whom will hold a meeting next month and which include China, Russia and Brazil.
US Treasury Secretary Janet Yellen told reporters that the “historic” agreement on a global minimum tax would “end the race to the bottom in corporate taxation and ensure fairness for the middle class and working people in the US around the world.”