On 5 June, G7 finance ministers (from Germany, Canada, the United States, France, Italy, Japan and the United Kingdom) met in London and struck a “historic” deal to introduce a global minimum corporate tax rate.
They hope to discourage tax dumping by imposing a global minimum corporate tax rate of at least 15%. Rishi Sunak, the UK finance minister, said that with the reform on the minimum corporate tax rate, one can be assured that “it’s fair so that the right companies pay the right tax in the right places.”
This agreement targets multinational companies (particularly the GAFA: Google, Apple, Facebook and Amazon), which, thanks to fiscal optimisation, often pay tax rates that are less than 5%. The announcement did not please everyone in Europe: Hungary, Cyprus and Ireland offer a lower tax rate of 13%. They argued that taxation is a matter of national sovereignty.
“According to a simulation published by the European Tax Observatory, a 15% tax rate would allow EU states to collect €50 billion in additional taxes in 2021, the equivalent of 7% of their health spending,” reports Le Monde. The agreement will be ratified by Joe Biden, the US President as well as other G7 Heads of State and will be adopted by the G20 next July in Venice, Italy.
Receive the best of European journalism straight to your inbox every Thursday
Was this article useful? If so we are delighted! It is freely available because we believe that the right to free and independent information is essential for democracy. But this right is not guaranteed forever, and independence comes at a cost. We need your support in order to continue publishing independent, multilingual news for all Europeans. Discover our membership offers and their exclusive benefits and become a member of our community now!
Are we trading our freedom and privacy in exchange for safety?
A Voxeurop Live video talk with journalists Andreas Vou (Big Techtopia) and Alexander Fanta (Netzpolitik).Go to the event >