G-7 wealthy nations agree to 15% global minimum tax in ‘unprecedented commitment’
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The Group of Seven wealthy nations has committed to moving toward a 15% global minimum tax on corporations that operate internationally, handing the Biden administration a win.
The G-7 features some of the world’s largest economies and includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The group said in a joint statement that it strongly supports efforts to “address the tax challenges arising from globalization and the digitalization of the economy and to adopt a global minimum tax.”
The proposed 15% rate agreed to by the G-7 is still higher than the corporate tax rate of some countries, including Ireland, which has a 12.5% rate. Hungary, which has a corporate income tax rate of only 9%, has already balked at the notion of a global minimum tax.
Many details of the plan still need to be sorted out, and the Group of 20, which includes economic powerhouses such as China and India, would need to throw its weight behind the effort in order to have the 15% effective globally.
Italian Finance Minister Daniele Franco said he wants to broaden the discussion about the 15% rate when G-20 finance ministers meet in July in his country, according to Bloomberg.
Companies in the U.S. pay a 21% corporate tax rate. The Biden administration has proposed raising the 21% domestic rate to 28% as a way to pay for a $2.3 trillion infrastructure package
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