A G7 deal on a minimum corporate tax rate is "within sight", finance ministers from France, Germany, Italy and Spain have confirmed before a two-day meeting of the world's richest nations. The talks have prepared the ground for a broader summit of G7 leaders in Cornwall, southwest England, starting Friday.
Momentum is growing behind the US-led plans to limit the ability of multinationals like tech giants to game the system to boost profits, especially at a time when economies around the world are reeling from the impact of the coronavirus pandemic.
Under Pillar One of this historic agreement, the largest and most profitable multinationals will be required to pay tax in the countries where they operate - and not just where they have their headquarters.
During the meeting, the finance ministers agreed the principles of an ambitious "two pillar" global solution to tackle the tax challenges arising from an increasingly globalised and digital global economy. It comes just over six months after the United Kingdom led the way by being the first country in the world to commit to do so in November 2020.
Finance Ministers also accelerated action on environmental issues, following in the UK's footsteps by committing for the first time to properly embed climate change and biodiversity loss considerations into economic and financial decision-making.
Furthermore, they will urge "equitable, safe and affordable access to Covid-19 vaccines" everywhere.
The thorny topic of the regulation of digital currencies such as bitcoin will also be on the agenda.
The second pillar is the 15 percent corporate tax rate, which the ministers believe will create a "level playing field" by removing incentives to shift profits between jurisdictions to avoid taxes.
Le Maire said a deal would send an important signal that the G7 - consisting of the United States, Japan, Germany, Britain, France, Italy and Canada - could still be influential.
"For more than four years, France, Germany, Italy and Spain have been working together to create an worldwide tax system fit for the 21st century", the four ministers wrote in a joint opinion piece.
The agreement was made at the G7 meeting in London today.
Ireland has expressed "significant reservations" about Biden's plan, however. Ireland - a member of the European Union - has a corporate tax rate of 12.5 percent, for example.
Official data showed Ireland's economy grew nearly eight percent in the first quarter, as multinational firms' revenues helped it continue to buck neighbours' pandemic downturns.
Is 15 percent too little? .
"A rate of 15 percent would in our opinion be largely insufficient", Oxfam France's senior policy officer Quentin Parrinello said.
But major disagreements do remain on both the minimum rate at which companies should be taxed, and on how the rules will be drawn up to ensure that very large companies with lower profit margins, such as Amazon, face higher taxes.
They say that a "race to the bottom" saps precious revenues that could go to government priorities like hospitals and schools.