Company tax deal is close, Paris and Berlin say
International talks to rewrite the rules of cross-border taxation are in the home stretch with a deal possible in the coming weeks, the French and German finance ministers said yesterday.
Nearly 140 countries are negotiating how to update rules on taxing multinationals in the age of cross-border digital commerce and set a global minimum corporate tax rate.
Any changes will have implications for Ireland which has enjoyed a boom in income from multinationals paying tax here in recent years, as use of tax havens to shift profits has been curtailed. Linking tax paid to where global businesses sell their products would hit reduce that Irish income by billions.
German Finance Minister Olaf Scholz said talks were taking place almost every day at various levels as officials race to clinch a long-sought deal in July.
“I have a very good feeling that in just a few weeks we will agree on a revolution in international corporate taxation, namely a reallocation of taxing rights and a global minimum tax,” Mr Scholz said in a joint online news conference with his French counterpart Bruno Le Maire.
Mr Le Maire said countries were “not far from an agreement”, first at a meeting of G7 finance ministers next week and then more broadly in July at the G20.
France’s conditions for an agreement were close to being met, he said, namely a credible level of minimum taxation following a US proposal last week for a 15pc minimum rate, and that all big digital companies are covered by the new rules on where multinationals are taxed.
“There is clearly the possibility of reaching a historical agreement by the G7 next week and by the next G20 at the beginning of July,” Mr Le Maire added.
While the aim is to have a deal in July, some officials have said that some details may have to be finalised in October as the US position hangs on what the Congress decides for a domestic tax reform there.