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Global Tax Deal Reached Among G7 Nations – The New York Times

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https://www.nytimes.com/2021/06/05/us/politics/g7-global-minimum-tax.html

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She described the agreement as “significant” and “unprecedented.”

“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 U.S. and around the world,” she said in a statement. “The global minimum tax would also help the global economy thrive, by leveling the playing field for businesses and encouraging countries to compete on positive bases, such as educating and training our work forces and investing in research and development and infrastructure.”

The Group of 7 delegations, which represent Britain, Canada, France, Germany, Italy, Japan and the United States, negotiated late into Friday to hash out details of how the new tax systems would work and the language in the statement.

France, which had been pushing for a tax rate above 15 percent, wanted to ensure that there remains flexibility for the tax to be higher. The United States was pushing European countries to eliminate their digital services taxes, which the administration says unfairly target American technology companies. France, Italy and Britain have resisted abandoning those taxes until the agreement is finished and in place — a process that could take up to four years.

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The joint statement, or communiqué, released on Saturday suggested that the digital taxes would remain in place for now.

“We will provide for appropriate coordination between the application of the new international tax rules and the removal of all digital services taxes, and other relevant similar measures, on all companies,” the statement said.

To prevent individual countries from imposing dozens of digital taxes around the world, the agreement reached Saturday would apply a new tax to large businesses with a profit margin of at least 10 percent. The finance ministers agreed that the tax would be applied to at least 20 percent of profit exceeding that 10 percent margin “for the largest and most profitable multinational enterprises.”

At a news conference on Saturday, Ms. Yellen said she expected the largest American technology firms would face the levy. Still, Ms. Yellen said she anticipated that they would appreciate the additional certainty the deal would bring, even if it resulted in paying more taxes.

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