The seven major Western economies confirmed this Saturday the historic agreement that will modernize the international tax scheme with the establishment of a minimum rate of 15% that will force the technological giants (Google, Facebook, Amazon or Apple) to make a higher contribution via taxes based on their level of profits. The pact, which was announced after 1:15 pm by the French Minister of Finance, Bruno La Maire – the same one who the day before already advanced that the agreement was “barely a millimeter” away from being achieved “- ratified the final arrangement, not without a certain euphoria.
“Here we are ! After 4 years of struggle, a historic agreement has been reached between the member states of the G7 on minimum taxes on companies and digital giants ”, he highlighted. Almost simultaneously, his British colleague, Rishi Sunak, used the same qualifier (“historical”) to congratulate himself on the success of a date he is hosting. “This is a landmark agreement on global tax reform that requires the biggest tech giants and multinationals to pay their fair share of taxes,” he stressed.
The pact reached by the economic leaders of the G7 on the second day of a meeting that started on Friday in London includes a Global minimum tax of 15% as a base that would affect multinationals with profit margins of at least 10%, as it has been negotiating in recent weeks.
Multinationals should pay taxes in the countries where they operate and not just where they have their headquarters. “The rules would apply to companies with at least a 10% profit margin, and they would see 20% of any profit above the 10% margin reallocated and then taxed in the countries in which they operate”, it is specified in the official statement.
This is what is identified as ‘pillar 2’ of the agreement, which specifies that “at least 15% of the global minimum tax” for these companies applied country by country “creating a more level playing field for companies and taking energetic measures against tax evasion ”.
The momentum of the United States has been decisive for this fundamental step that puts the negotiations on the highest level that will be maintained by the leaders next week in Cornwall. The senior leaders of the United States, Canada, France, Germany, Italy, Japan and the United Kingdom will further pave the way for the activation of this corporate tax reform ahead of the G20 meeting scheduled for July in Venice and, ultimately instance, its final acceptance within the World Trade Organization (WTO) already in autumn.
At least 135 countries had been negotiating in this international organization the imposition of a minimum tax on large multinationals and, consequently, the updating of a fiscal regime anchored in the economic scenario that existed almost a century ago and that with the explosion of technological it was letting billions of euros slip into the public coffers. The commitment also comes at a time when countries’ public debts have skyrocketed to combat the effects of the pandemic.