G7 decide on global minimum tax and digital tax

After years of negotiations, the G7 have decided on a digital tax and a global minimum tax for multinational companies. The new types of taxes are intended to ensure fair taxation at an international level.

At the last summit, the G7 finance ministers agreed on the introduction of a global minimum tax. Large corporations around the world will, in the future, have to pay a minimum tax of at least 15 percent. The goal is to increasingly ask international companies to pay their fair share and thus prevent the global race to the lowest tax rate.

Bringing the G20 on board

In addition to Great Britain, France, Germany, and Italy, the USA, Japan, and Canada are also members of the G7, those democratic economic powers that want to implement a global minimum tax. The next step is to win over the expanded group of the G20 for the idea. Resistance to the global minimum tax is particularly expected from the BRIC countries – Brazil, Russia, India, and China. The next meeting of the 20 most important economic powers will take place in July in Italy.

Effects on Switzerland unclear

So far, the G7 countries have only agreed on the key values of the minimum taxation. How much leeway there is for companies or the room for loopholes will only be revealed with the elaboration of the detailed rules. Therefore, the concrete effects of the tax reform remain unclear for the time being. Since the global minimum tax is also expected to be implemented in the OECD, Switzerland will also feel the changes. A total of 18 out of the 26 cantons currently demand less from companies than the targeted minimum tax rate of 15 percent. These cantons would be forced to raise taxes. However, due to the high number of skilled workers and legal security, Switzerland remains an attractive location for companies.

Digital tax for Apple, Google and Co.

In addition to the global minimum tax, the leading industrial nations have also agreed on the introduction of a digital tax. The goal of the tax is to increasingly ask multinational large corporations of the digital sector, such as Apple or Google, to pay their fair share. Until now, these companies were only taxed at the location of their headquarters, not in the countries where the revenues were actually generated. For large corporations, it was therefore easy to relocate their headquarters to low-tax countries to save on taxes. This is set to change in the future.

Source: https://www.srf.ch/news/international/steuern-fuer-unternehmen-g7-finanzminister-einigen-sich-auf-mindeststeuer-von-15-prozent

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