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G7 reaches deal on plan to tax multinational companies

The world's richest countries have reached an agreement on a historic deal to establish a global ...
Marita Moloney
Marita Moloney

12.46 5 Jun 2021


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G7 reaches deal on plan to tax...

G7 reaches deal on plan to tax multinational companies

Marita Moloney
Marita Moloney

12.46 5 Jun 2021


Share this article


The world's richest countries have reached an agreement on a historic deal to establish a global minimum corporate tax rate.

Finance ministers of the G7 nations came to a consensus this afternoon on tackling corporate tax avoidance by big tech companies.

The finalised agreement will set the minimum level of global corporation tax at 15%.

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The move will likely put pressure on Ireland to increase its rate above the current 12.5%.

Rich nations have struggled for years to agree a way to raise more revenue from large multinationals such as Google, Amazon and Facebook, which often book profits in jurisdictions where they lower rates of tax.

The Minister for Finance Paschal Donohoe has been attending the talks in London in his capacity as President of the Eurogroup.

Following today's meeting, he said: "I note the joint position by G7 finance ministers on international corporate taxation.

"It is in everyone’s interest to achieve a sustainable, ambitious and equitable agreement on the international tax architecture.

"I look forward now to engaging in the discussions at the OECD. There are 139 countries at the table, and any agreement will have to meet the needs of small and large countries, developed and developing."

g7 Eurogroup President Paschal Donohoe pictured as finance ministers from across the G7 nations meet at Lancaster House in London ahead of the G7 leaders' summit. Photo: Henry Nicholls/Pool Photo via AP

Speaking to Down to Business with Bobby Kerr earlier, Stephen O'Leary from Olytico and board member of Dublin Chamber of Commerce said the Finance Minister would play an important role:

He said it would be one thing to get a deal agreed today, but it will take "real work" in the coming months to get legislation formalised and buy-in from other countries.

Mr O'Leary added that the role of Pashal Donohoe during the leaders' summit is "absolutely key", despite Ireland not a signatory to the agreement as we are not in the G7.

"The only reason Donohue is there is because of his European position, and sometimes we look at those positions and say, 'Well that's a handy little number and isn't that great, but what does it really mean'?

"But it's so important, it's being at the table but it's also beside the table, it's the conversations he can have on the fringes with people who are so central to this position.

"We all know from business it's those conversations, being able to talk to people directly and say, 'Listen, this is how this affects Ireland, this is what we want you to do', that lobbying work is so, so important.

"I think we're really lucky to have Donohoe there this weekend."

Today's agreement was hailed by UK Chancellor Rishi Sunak as a "proud moment", as it "meant the right companies pay the right tax in the right places".

He called it a "historic agreement that finally brings our global tax system into the 21st century", adding: "We're going to level the playing field and inject some fairness into the system."

Main image: From left: Paolo Gentiloni, Paschal Donohoe, David Malpass, Daniele Franco, Bruno Le Maire, Chrystia Freeland, Rishi Sunak, Kristalina Georgieva, Olaf Scholz, Janet Yellen, Mathias Cormann, Taro Aso. Photo: Henry Nicholls/Pool Photo via AP

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