Finance ministers from the G7 group of leading economies are confident of striking a deal on taxing multinational companies at their meeting in London.

The agreement is expected to include a global minimum rate of corporation tax.

It would target tech giants such as Amazon and Microsoft.

German finance minister Olaf Scholz said the deal would "change the world".

He said a 15% rate would help pay back debts that have built up during the pandemic - and that he was "absolutely confident" there would be an agreement.

"If we agree on the minimum taxation for corporates, this will help to go out of this race to the bottom we see with taxes today," he told the BBC.

"And this will help the countries we live in to finance their tasks, and - especially after Covid crisis and all the money we spent - to defend the health of the people, and to defend the economy."

French finance minister Bruno le Maire urged Ireland, which has one of the lowest corporate tax rates in the European Union, at 12.5%, to get "on board".

He told the BBC: "European countries, that in the past, opposed this new international tax system, must understand that they have to give the agreement to this major breakthrough".

'Starting points and sticking points'
Both ministers said agreement on a minimum rate remained a sticking point.

Mr Le Maire said he saw the 15% rate as a "starting point".

He said: "If it can be higher, it is better to have a higher rate than 15%."

Mr Scholz suggested that 15% would be an effective starting point that would mark a "turning point" after years of going in the other direction.

It came after UK Chancellor Rishi Sunak said he was "confident" of reaching a global agreement on digital taxation ahead of a meeting of world finance leaders.

Finance minsters will also discuss climate change at the two-day meeting which started in London on Friday.

Ahead of the G7 talks, Mr Le Maire and Mr Scholz along with their counterparts in Italy and Spain co-signed a letter urging an agreement on an international tax system "fit for the 21st Century".

In a letter to The Guardian, they wrote: "Introducing this fairer and more efficient international tax system was already a priority before the current economic crisis, and it will be all the more necessary coming out of it."

Source: BBC

BDST: 1242 HRS, JUN 5, 2021
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