The G7 agree on a common global corporation tax

The wealthy nations have come up with a landmark deal in which multinational companies will have to pay a set minimum rate of tax in all countries where they do business.

A rate of 15% was agreed, despite US President Joe Biden pushing for 21% instead. The main benefit of the agreement is that it will stop multinationals playing countries off against each other, in order to reduce their overall tax bill. Historically, countries with the lowest taxes would be where companies would locate their operations. Now, multinationals must pay an internationally-agreed, minimum level of tax in countries where their factories or operations are located, in addition to where the company is headquartered. With all countries on an equal footing, this should mean none lose out.

It is hoped that the deal will also be agreed by the G20 countries later in the year too.

The deal, however, has its critics. International aid organisation Oxfam, suggested that the minimum level agreed was too low, being similar to current tax havens including Ireland and Singapore, thus limiting the benefits gained by so-called host countries.

For more on this story, check out this news report.