G7 reaches "historic agreement" on global tax reform

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The Group of Seven nations on Saturday reached a historic deal to reform the global tax system, agreeing that corporations around the world should pay at least a 15% tax on earnings.

The state of play: The global tax minimum was proposed by Treasury Secretary Janet Yellen last month, per CNN. The new reforms will affect the world's largest firms with profit margins of at least 10%, U.K. Finance Minister Rishi Sunak explained.

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  • The deal also ends national digital service taxes, which had the support of several European countries, but which U.S. officials said would unfairly target American technology giants, per Reuters.

  • Yellen said that both Amazon and Facebook will be covered under the arrangement: "It will include large profitable firms and those firms, I believe, will qualify by almost any definition."

  • G7 finance ministers also agreed to tackle environmental crime "with a new task force on nature-related financial disclosures to mirror the work of the Task Force on Climate Related Financial Disclosures," Bloomberg writes.

What they're saying: "G7 finance ministers today, after years of discussions, have reached a historic agreement to 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," Sunak said.

  • "That global minimum tax would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world," Yellen said.

What to watch: Sunak said G20 finance ministers will discuss the agreement in July.

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