G7 Finance Ministers Agree on Global Minimum Corporate Tax Rate of 15%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Gwan-joo] Finance ministers of the Group of Seven (G7) agreed on a global minimum corporate tax rate of 15% on the 5th (local time), according to major foreign media reports.

Rishi Sunak, the UK Chancellor of the Exchequer and chair of the G7 meeting, said, "A historic agreement has been reached to reform the global tax system for the digital age." He explained that this agreement creates a level playing field for companies.

The agreement will be discussed at the upcoming Group of Twenty (G20) finance ministers' meeting next month.

Countries have been discussing ending the race to the bottom on corporate tax rates and increasing tax revenues, with urgency heightened by the recent COVID-19 pandemic.

The G7 finance ministers also discussed measures to address the issue of large IT companies such as Facebook, Amazon, and Google avoiding taxes by locating headquarters in low-tax jurisdictions, and ensuring taxes are paid where revenues are generated.