Group of Seven wealthy nations backs steps to deter tax dodging by multinational firms

The Group of Seven wealthy democracies agreed June 5 to support a global minimum corporate tax of at least 15% to deter multinational companies from avoiding taxes by stashing profits in low-rate countries. G7 finance ministers meeting in London also endorsed proposals to make the world’s biggest companies — including U.S.-based tech giants — pay taxes in countries where they sell in large amounts but have no physical headquarters. British Treasury chief Rishi Sunak said the deal would “reform the global tax system to make it fit for the global digital age and crucially to make sure that it’s fair, so that the right companies pay the right tax in the right places.” Nations have been grappling for years with the question of how to deter companies from legally avoiding paying taxes by using accounting and legal schemes to assign their profits to subsidiaries in tax havens — typically small countries that entice companies with low or zero taxes, even though the firms do little actual business there. (AP) This article was provided by The Japan Times Alpha.