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7 June 2021

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G7 Finance Ministers Reach Agreement on Global Minimum Tax and Market Country Taxing Rights

The U.S. Department of the Treasury has published the G7 Finance Ministers and Central Bank Governors Communiqué following their meeting held 4 to 5 June 2021. With respect to taxation, the key point of the meeting is the agreement reached on the introduction of rules for a global minimum tax and the allocation of taxing rights to market countries, which is addressed as follows in the communiqué:

Shaping a Safe and Prosperous Future for All

16. We strongly support the efforts underway through the G20/OECD Inclusive Framework to address the tax challenges arising from globalisation and the digitalisation of the economy and to adopt a global minimum tax. We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises. 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. We also commit to a global minimum tax of at least 15% on a country by country basis. We agree on the importance of progressing agreement in parallel on both Pillars and look forward to reaching an agreement at the July meeting of G20 Finance Ministers and Central Bank Governors.

In addition to the communiqué, a statement from Secretary of the Treasury Janet Yellen was also published as follows:

Statement from Secretary of the Treasury Janet L. Yellen on G7 Finance Ministers' Commitment to Global Minimum Tax

The G7 Finance Ministers have made a significant, unprecedented commitment today that provides tremendous momentum towards achieving a robust global minimum tax at a rate of at least 15%. 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. 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.

Lastly, a transcript of the press conference by Secretary Yellen following the close of the G7 Finance Ministers meeting has also been published.

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