G7 agrees to tax big firms and squeeze havens

The G7 richest nations have reached a landmark deal to squeeze tax havens and back a minimum global corporate tax of 15%, to end what the United States called a "race to the bottom" on global taxation.

Lucy Fielder reports.

The G7 reached a landmark deal on Saturday (June 5) to pursue higher global taxation on multinational businesses such as Google, Apple and Amazon.

And Facebook - which said it welcomed the deal and accepted this could mean it would pay more tax.

The United States, Britain and five other leading advanced economies agreed to back a minimum global corporate rate of at least 15% and for companies to pay more tax in the markets where they sell goods and services.

It's a step that could raise hundreds of billions of dollars to help them cope with the aftermath of the past year's economic turmoil.

U.S. Treasury Secretary Janet Yellen said the "significant, unprecedented commitment" would end what she called a race to the bottom on global taxation.

The deal was years in the making, and it also promises to end national digital services taxes levied by Britain and other European countries -- which the United States says unfairly target U.S. technology giants.

However, the measures will first need to find broader agreement at a meeting of the G20 - which includes a number of emerging economies - due to take place next month in Venice.

The ministers also agreed to move towards making companies declare their environmental impact in a more standard way so investors can decide more easily whether to fund them, a key goal for Britain.

Rich nations have struggled for years to agree a way to raise more revenue from large multinationals, which often book profits in countries where they pay little or no tax.

U.S. President Joe Biden's administration gave the stalled talks fresh impetus by proposing a minimum global corporation tax rate of 15%, above the level in countries such as Ireland but below the lowest level in the G7.

The agreement does not make clear exactly which businesses will be covered by the rules, referring only to "the largest and most profitable multinational enterprises."