The G7 is said to be nearing an agreement over corporation tax for multinationals, paving the way for a new global tax regime cracking down on some of the world’s largest companies.
A pact between the major economies could be inked as early as Friday following progress in talks among top officials in recent days, the Financial Times reported.
A deal would be an important precursor to formal negotiations taking place at the OECD in Paris between the wider G20 countries.
It forms part of long-running efforts to overhaul the global corporation tax regime, cracking down on multinational businesses that book profits in low-tax jurisdictions and ensure tech giants pay their fair share.
Under President Joe Biden, the US has been pushing for an agreement between G7 countries to help accelerate the wider OECD talks, with the aim of reaching a global deal in the coming months.
The US last week agreed to accept a minimum rate of 15 per cent — down from its previous targets of 21 per cent. France, Germany and Italy have since said this level was a good basis for securing an international agreement by July.
“The world is closer than ever before to a global minimum tax,” US National Security Adviser Jake Sullivan wrote in a tweet over the weekend.
“Great to hear the positive reception to our proposal. This is what it looks like to lead the world to end the race to the bottom.”
If finance ministers can reach an agreement in the coming weeks, it could be formally signed off by G7 leaders at a summit in Cornwall in June. The G20 has said it wants to finalise a deal by the summer.
In the UK the Labour Party has been ramping up the pressure on chancellor Rishi Sunak to support a new minimum corporate tax rate as part of the revamp.
Shadow Chancellor Rachel Reeves and Shadow Foreign Secretary Lisa Nandy have jointly written to the government saying the proposal is a “once in a generation opportunity to stop huge multinationals avoiding British tax”.