G-7 nations sign an agreement to global corporate tax of 15%

London: The world’s richest countries signed a landmark agreement on Saturday committing them to confronting corporate tax avoidance and making sure that giant tech companies pay their fair share, Britain’s treasury chief said.

The G-7 ministers agreed in principle to a global minimum tax rate of 15 percent for multinational companies in each country they operate in.

US Treasury Secretary Janet Yellen, who attended the London meetings, said the agreement “provides tremendous momentum” towards reaching a global 15 percent rate that “would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the US and around the world.”

The meeting of finance ministers came ahead of an annual summit of G-7 leaders scheduled for  11-13 June in Carbis Bay, Cornwall. The UK is hosting both sets of meetings because it holds the group’s rotating presidency.

The G-7 has also been facing pressure to provide vaccines for low-income countries facing new surges of COVID-19 infections and to finance projects to combat climate change.

International discussions on the tax issue gained momentum after US president Joe Biden backed the idea of a global minimum 15 percent corporate profit tax rate. The proposal also found support among other major economies such as France and Germany.