- Tech companies signaled approval of a “significant” deal to back a 15% global minimum corporate tax.
- Treasury Secretary Janet Yellen said it was a “significant, unprecedented commitment.”
- Facebook welcomed “the important progress made at the G7,” VP Nick Clegg told Insider.
- See more stories on Insider’s business page.
As finance ministers from the Group of Seven countries agreed on Saturday to back a 15% global minimum corporate tax rate, the world’s biggest tech companies signaled approval.
“Facebook has long called for reform of the global tax rules and we welcome the important progress made at the G7,” said Nick Clegg, vice president for global affairs at Facebook, in an emailed statement.
The agreement announced in London between the wealthy G7 nations marked a meaningful step toward closing often-used international tax loopholes, which have allowed the biggest companies in the world to sidestep taxes at home and aboard.
The official announcement via the UK government called the deal a “seismic agreement,” adding that it meant the “largest multinational tech giants will pay their fair share of tax in the countries in which they operate.” It did not name specific companies that would be affected.
Treasury Secretary Janet Yellen said the deal marked a “significant, unprecedented commitment.”
“That global minimum tax 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,” said Yellen, who is in London for the talks.
UK Chancellor Rishi Sunak said the deal was a “huge prize” for British taxpayers. An Amazon spokesperson told Insider: “We believe an OECD-led process that creates a multilateral solution will help bring stability to the international tax system. The agreement by the G7 marks a welcome step forward in the effort to achieve this goal. We hope to see discussions continue to advance with the broader G20 and Inclusive Framework alliance.”
A Google spokesperson told Reuters: “We strongly support the work being done to update international tax rules. We hope countries continue to work together to ensure a balanced and durable agreement will be finalized soon.”
Clegg, of Facebook, added, “Today’s agreement is a significant first step towards certainty for businesses and strengthening public confidence in the global tax system. We want the international tax reform process to succeed and recognize this could mean Facebook paying more tax, and in different places.”
Ursula von der Le yen, president of the European Commission, said the bloc had been pushing for “modernisation & more international cooperation on business taxation.”
“This agreement is a big step towards fairness and a level-playing field,” she added.
Others were less enthusiastic. Oxfam, for example, said the G7 deal was “setting the bar so low that companies can just step over it,” according to Reuters.
“It’s absurd for the G7 to claim it is ‘overhauling a broken global tax system’ by setting up a global minimum corporate tax rate that is similar to the soft rates charged by tax havens like Ireland, Switzerland and Singapore,” the charity said.