The G7 economies – Canada, the United States, Japan, France, Germany, Italy and the United Kingdom – are close to reaching an agreement on taxing multinationals, according to the British newspaper. Financial times. The newspaper suggested that it could close a deal on Friday, then move it to the formal negotiations of the Organization for Economic Cooperation and Development (OECD) and the Group of Twenty scheduled to take place in early July in Venice. All the spotlight is on this appointment, as consensus is expected to finally be reached on reforming international financial rules after last year’s failure.
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The Paris-based agency is responsible for directing negotiations to amend the international tax framework, which was designed over a century ago, and to make sure that the big companies pay their taxes. The Think tank The year 2020 was set as the deadline for approval of more than 130 judicial authorities to participate in the talks, but they fell short of their goal: The pandemic and former US President Donald Trump’s decision to abandon the talks prevented a consensus being reached. Now, with the grafting process already underway, and above all, with a new tenant in the White House, the OECD hopes to tie this year’s deal, before political and then technical later.
Both Joe Biden and Treasury Secretary Janet Yellen were clearly in favor of amending the system to tax multinational corporations, in a clear break with the previous administration: They had already proposed a global minimum corporate tax rate and a formula for equitable distribution of revenue from the world’s largest corporations. They are two of the pillars that the Organization for Economic Cooperation and Development has been working on for years. That way, it will be the ability of large groups to shift benefits to low-tax regions and avoid paying the tax bill that matches them in states where they create limited businesses.
American pressure
The Financial issues Times Ensures that the new democratic administration has come under pressure for the G7 to reach a consensus of its own and thus speed up talks at the Organization for Economic Cooperation and Development. I came to the United States last week Think tank His official proposal for a global minimum tax rate for multinational corporations, although more decaffeinated than he initially suggested: he requested an effective rate of at least 15%, instead of the 21% previously provided. Nevertheless, that rate could generate more consensus. A: It is closer to that of countries like Ireland, which has become one of the preferred jurisdictions for multinational corporations due to its low rates (12.5%) and is part of the bloc of most frequented countries. To an international agreement.
Several European governments have shown their support in the face of this radical transformation of the United States in financial matters. Germany and Italy publicly support the proposal to establish a global tax floor. The Financial times He noted that France and the United Kingdom have given greater importance to the second pillar, which is determining where to pay taxes, and that international officials describe the UK as a “difficult” partner in the negotiations. But in London, ministers and officials insist they want to make sure both elements of the deal are given priority, the City Daily adds.
The G7 has no official role in the process, but the British newspaper states that it represents a powerful bloc with the potential to advance negotiations in the Organization for Economic Cooperation and Development. The group will hold a virtual meeting on Friday between finance ministers and a face-to-face meeting on 4 and 5 June in London, where the basic elements of the agreement can be agreed upon. In a week, the G7 leaders will meet.
