The US, Britain and other leading nations reached a landmark deal on Saturday to pursue higher global taxation on multinational businesses, such as Google, Apple and Amazon. In a move that could raise hundreds of billions of dollars to help them cope with the aftermath of COVID-19, the Group of Seven (G7), large, advanced economies agreed to back a minimum global corporate rate of at least 15 per cent and for companies to pay more tax in the markets where they sell goods and services. 

“G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age,” British Finance Minister Rishi Sunak said after chairing a two-day meeting in London. US Treasury Secretary Janet Yellen said the “significant, unprecedented commitment” would end what she called a race to the bottom on global taxation. 

The deal, which was years in the making, also promises to end national digital services taxes levied by Britain and other European countries, which the US said had unfairly targeted US technology giants. However, the measures will first need to find broader agreement at a meeting of the G20 – which includes a number of emerging economies – due to take place next month in Venice. “It’s complicated, and this is a first step,” Mr Sunak said. 

The ministers also agreed to move towards making companies declare their environmental impact in a more standard way so that investors can decide more easily whether to fund them, a key goal for Britain. Rich nations have struggled for years to agree to a way to raise more revenue from large multinationals, such as Google, Amazon and Facebook, which often book profits in jurisdictions where they pay little or no tax.