G7 agrees compromise with US over global minimum tax for firms
The agreement means that US companies would be exempt from the global minimum tax but would instead be subject to taxation under a parallel US system, according to a statement from the Canadian G7 presidency following a summit there earlier this month.
It has been agreed that the arrangement proposed by Washington ensures progress in combating international profit shifting.
After taking office again in January, President Donald Trump declared the global minimum tax for large companies invalid in the United States.
The White House views the global tax agreement as an unacceptable infringement on national sovereignty over finances and taxation.
The minimum tax idea is part of a global corporate tax reform agreed by approximately 140 countries via the Organisation for Economic Co-operation and Development (OECD).
Under the agreement, all multi-nationals with annual revenues exceeding €750 million (US$880 million) must pay at least 15 per cent in taxes, regardless of where the profits are generated.
German Finance Minister Lars Klingbeil welcomed the compromise following talks by the Group of Seven major industrialised democracies.
'The G7 agreement makes it possible for us to further advance the fight against tax havens, tax evasion and tax dumping,' he said in a statement on Sunday.
He added that the US no longer opposes the global minimum tax per se, and planned punitive measures against European companies have been dropped.
'This allows the OECD and US minimum taxes to coexist,' he said. –BERNAMA-dpa
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