G-7 to commit to ‘high level of ambition’ on global minimum tax rate

Group of Seven (G-7) finance ministers this week are expected to pledge to be ambitious about the rate for a global minimum tax as international tax negotiators are seeking to reach a deal in July, Reuters reports.

“We commit to reaching an equitable solution on the allocation of taxing rights and to a high level of ambition on the rate for a global minimum tax,” a draft statement viewed by Reuters said. The draft did not mention a specific number for a rate.

Finance ministers in the G-7, including Treasury Secretary Janet Yellen, are slated to meet in London later this week. The G-7 consists of the United States, Canada, France, Germany, Italy, Japan and the United Kingdom.

The meeting comes amid negotiations among the broader Group of 20 (G-20) and the Organization for Economic Cooperation and Development (OECD) on international tax issues, including a global minimum tax.

There currently is no global minimum tax. An agreement at the OECD would encourage countries to take steps to ensure that the foreign earnings of their multinational companies are subject to a minimum level of tax.

The Biden administration has floated a global minimum tax rate of at least 15 percent. The administration views a deal on a global minimum tax as a way to help ensure that U.S. companies are internationally competitive if the U.S. raises its corporate tax rate, as Biden has proposed.

The G-20 is hoping to reach a political agreement on a global minimum tax at its meeting next month.

“We … look forward to reaching an agreement at the July meeting of G20 finance ministers and central bank governors,” the G-7 draft stated, according to Reuters.