G7 meeting in London, early May.HOLLIE ADAMS / POOL / EFE
The major G7 economies - Canada, the United States, Japan, France, Germany, Italy and the United Kingdom - are close to reaching an agreement on the taxation of multinationals, according to the British newspaper
Financial Times
.
The newspaper advances that they could close an agreement this Friday, and then take it to the formal negotiations of the Organization for Economic Cooperation and Development (OECD) and the G20 scheduled for the beginning of July in Venice.
All the lights are on this appointment, as it is expected that a consensus will finally be reached on the reform of international fiscal rules after the failure of last year.
More information
The United States formalizes its proposal for a global corporate rate of 15% to the OECD
The OECD is in charge of directing the negotiations to modify the international tax framework, designed a century ago, and ensure that large corporations pay their taxes. The Paris-based body had set itself 2020 as the deadline to agree to the more than 130 jurisdictions participating in the talks, but it did not achieve its goal: the pandemic and the decision of former US President Donald Trump to abandon the conversations prevented reaching a consensus. Now, with the vaccination process already on track and, above all, with a new tenant in the White House, the OECD hopes to tie an agreement this year, before political and later technical.
Both Joe Biden and his Secretary of the Treasury, Janet Yellen, have been clearly in favor of modifying the system to tax multinationals, in a clear break with the previous Administration: they have already proposed setting a global minimum corporate tax rate and a formula for equitably distributing the revenues from the world's largest corporations, which are two of the pillars of the agreement on which the OECD has been working for years.
In this way, the ability of large groups to transfer benefits to low-tax territories and avoid paying the tax bill that corresponds to them in the States where they generate business would be limited.
US pressure
The Financial
Times
assures that the new Democratic Administration has been pushing for the G7 to reach its own consensus and thus speed up the talks in the OECD. Last week, the US presented to the body its formal proposal on a global minimum tax for multinationals, although more decaffeinated than initially proposed: it asked for an effective rate of at least 15%, instead of the 21% previously advanced. This percentage can, however, generate more consensus: it is closer to that of countries such as Ireland, which has become one of the favorite jurisdictions for multinationals due to its low rates (12.5%) and is part of the block of States more reluctant to an international agreement.
Several European governments have shown their support in the face of this radical turn of the US in fiscal matters. Germany and Italy have openly supported the proposal to establish a global minimum tax.
The Financial Times
notes that France and the United Kingdom have placed more importance on the second pillar, that of determining where to pay taxes, and that international officials describe the United Kingdom as a "difficult" partner in the negotiations. But in London, ministers and officials insist they want to make sure both elements of the deal are prioritized, the
City
daily adds
.
The G7 does not have a formal role in the process, but the British newspaper recalls that it represents a powerful bloc with the capacity to promote negotiations in the OECD. The group will hold a virtual meeting on Friday between finance ministers and a face-to-face meeting on June 4-5 in London, where the core elements of an agreement can be agreed. A week later, the G7 leaders will meet.