It is no secret that many governments have struggled to tackle the tax challenges that arise from an increasingly globalised and digital economy.
However, following years of discussion, on 5 June 2021 G7 agreed to back an historic international agreement on a global tax reform, which will push for the largest multinational tech giants to pay their fair share of tax in the countries they operate – not just in their headquarters.
The deal also saw finance ministers agreeing to the principle of a global minimum corporation tax rate of 15% on a country-by-country basis. This creates a more level playing field for UK business and represents a crackdown on tax avoidance.
The meeting also saw G7 countries commit to developing a baseline global standard for sustainability reporting, following the UK’s lead to not only make climate reporting mandatory but also to crack down on the proceeds of environmental crimes.
Rishi Sunak has hailed the landmark deal as representing a “truly historic agreement” that will create “seismic tax reform” across the world.
The agreement will now be discussed in further detail at the G20 Financial Ministers & Central Bank Governors meeting in July.
For further information please see link to Gov.uk