Finance ministers and Central Bank governors of the Group of 7 (G7) have committed to a global minimum tax of at least 15% on a country-by country basis. They also agreed on “the importance of progressing agreement in parallel on both Pillars and look forward to reaching an agreement at the July meeting of G20 Finance Ministers and Central Bank Governors”.
This was one of the decisions outlined in their communique released on June 5. This development, hailed by some as ‘historic’, will form the basis of what rich countries are hoping to be a multilateral deal. The aim of a global minimum tax rate is to stop corporate tax competition among countries and discourage multinationals from shifting profits to more tax competitive jurisdictions. It should be noted that the proposed global minimum corporate tax rate of 15% falls below the average statutory income tax rate among OECD countries of 21%.
The Finance Ministers and Central Bank Governors of the G7, met virtually on 28 May 2021. This was followed by a further meeting of Finance Ministers and Heads of major global financial institutions, the International Monetary Fund (IMF), World Bank Group, Organisation for Economic Cooperation and Development (OECD), Eurogroup, Financial Stability Board (FSB) on 4-5 June 2021.
Read the full communique here.