London Daily

Focus on the big picture.
Thursday, Dec 04, 2025

G7 nations close to historic deal to tax tech giants in plan that would 'change the world', says German finance minister

G7 nations close to historic deal to tax tech giants in plan that would 'change the world', says German finance minister

The plan to reform the taxation of tech firms and bring in a minimum level for business tax rates would "change the world".

The world's leading economies are on the brink of announcing a historic deal to tax the tech giants, the German finance minister has told Sky News.

Olaf Scholz said the plan to reform the taxation of tech companies and introduce a minimum level for business tax rates would "change the world", bringing in billions of pounds in tax revenue which would otherwise have been shifted to low tax countries.

The comments came as ministers from the Group of Seven (G7) industrialised economies met in London for the first such face-to-face summit since the onset of COVID-19 over a year ago.

In part because of pressure from the Biden White House and US Treasury secretary Janet Yellen, the G7 ministers are understood to be on the brink of announcing an unprecedented set of reforms.

The plan would help combat profit shifting, where companies - including tech giants and multinational brands - can shift profits to low tax jurisdictions.

The deal entails two "pillars": First, there will be special rules to change how much tax some large companies will pay, and where those taxes are paid.

Hitherto business taxes were based purely on company profits; in future a chunk of those taxes will be calculated based on sales.

The second pillar involves the creation of a global minimum corporate tax rate, designed to encourage countries not to cut their business tax rate below 15%.

Speaking on the fringes of the London meeting between the US, UK, Japanese, German, French, Italian and Canadian finance ministers, Mr Scholz said: "That we've made progress on both pillars is what we have worked on so hard.

"It looks as if we will now make it, and it will change the world.

"We've worked very hard in the last few years to make progress step by step, we discussed with many people and many experts on this question and with many other countries, but now we are at a stage where an agreement is feasible.

"This is a historic moment, and it will help us to do our job: to serve our people. It's about fairness and justice."

Chancellor Rishi Sunak at a meeting of finance ministers from across the G7 nations


Asked about the implications of a deal for the tax revenues of developed countries, which some experts calculate could be boosted by many billions as profits are shifted back from tax havens, Mr Scholz said: "This will help finance our countries.

"We will profit very much from an agreement like this. But it's also a starting point for more fairness - that's what this is what it is about."

According to others close to the negotiations, the technical talks are still ongoing, with "sherpas" from G7 nations expected to carry on discussing details through the night.

However, Mr Scholz's comments represent the clearest sign yet that the G7 is likely to seal a deal on tax avoidance on Saturday.

That deal would be highly significant since it would encourage finance ministers from other, smaller countries to sign up to the deal.

But, there are some nations - most notably Ireland - which are holding out.

With its 12.5% corporate tax rate, Ireland would be directly affected by the global minimum rate, and would have to decide whether to increase its level or to face penalties from those economies committing to the new pact.

Newsletter

Related Articles

0:00
0:00
Close
India backs down on plan to mandate government “Sanchar Saathi” app on all smartphones
King Charles Welcomes German President Steinmeier to UK in First State Visit by Berlin in 27 Years
UK Plans Major Cutback to Jury Trials as Crown Court Backlog Nears 80,000
UK Government to Significantly Limit Jury Trials in England and Wales
U.S. and U.K. Seal Drug-Pricing Deal: Britain Agrees to Pay More, U.S. Lifts Tariffs
UK Postpones Decision Yet Again on China’s Proposed Mega-Embassy in London
Head of UK Budget Watchdog Resigns After Premature Leak of Reeves’ Budget Report
Car-sharing giant Zipcar to exit UK market by end of 2025
Reports of Widespread Drone Deployment Raise Privacy and Security Questions in the UK
UK Signals Security Concerns Over China While Pursuing Stronger Trade Links
Google warns of AI “irrationality” just as Gemini 3 launch rattles markets
Top Consultancies Freeze Starting Salaries as AI Threatens ‘Pyramid’ Model
Macron Says Washington Pressuring EU to Delay Enforcement of Digital-Regulation Probes Against Meta, TikTok and X
UK’s DragonFire Laser Downs High-Speed Drones as £316m Deal Speeds Naval Deployment
UK Chancellor Rejects Claims She Misled Public on Fiscal Outlook Ahead of Budget
Starmer Defends Autumn Budget as Finance Chief Faces Accusations of Misleading Public Finances
EU Firms Struggle with 3,000-Hour Paperwork Load — While Automakers Fear De Facto 2030 Petrol Car Ban
White House launches ‘Hall of Shame’ site to publicly condemn media outlets for alleged bias
UK Budget’s New EV Mileage Tax Undercuts Case for Plug-In Hybrids
UK Government Launches National Inquiry into ‘Grooming Gangs’ After US Warning and Rising Public Outcry
Taylor Swift Extends U.K. Chart Reign as ‘The Fate of Ophelia’ Hits Six Weeks at No. 1
250 Still Missing in the Massive Fire, 94 Killed. One Day After the Disaster: Survivor Rescued on the 16th Floor
Trump: National Guard Soldier Who Was Shot in Washington Has Died; Second Soldier Fighting for His Life
UK Chancellor Reeves Defends Tax Rises as Essential to Reduce Child Poverty and Stabilise Public Finances
No Evidence Found for Claim That UK Schools Are Shifting to Teaching American English
European Powers Urge Israel to Halt West Bank Settler Violence Amid Surge in Attacks
"I Would Have Given Her a Kidney": She Lent Bezos’s Ex-Wife $1,000 — and Received Millions in Return
European States Approve First-ever Military-Grade Surveillance Network via ESA
UK to Slash Key Pension Tax Perk, Targeting High Earners Under New Budget
UK Government Announces £150 Annual Cut to Household Energy Bills Through Levy Reforms
UK Court Hears Challenge to Ban on Palestine Action as Critics Decry Heavy-Handed Measures
Investors Rush Into UK Gilts and Sterling After Budget Eases Fiscal Concerns
UK to Raise Online Betting Taxes by £1.1 Billion Under New Budget — Firms Warn of Fallout
Lamine Yamal? The ‘Heir to Messi’ Lost to Barcelona — and the Kingdom Is in a Frenzy
Warner Music Group Drops Suit Against Suno, Launches Licensed AI-Music Deal
HP to Cut up to 6,000 Jobs Globally as It Ramps Up AI Integration
MediaWorld Sold iPad Air for €15 — Then Asked Customers to Return Them or Pay More
UK Prime Minister Sir Keir Starmer Promises ‘Full-Time’ Education for All Children as School Attendance Slips
UK Extends Sugar Tax to Sweetened Milkshakes and Lattes in 2028 Health Push
UK Government Backs £49 Billion Plan for Heathrow Third Runway and Expansion
UK Gambling Firms Report £1bn Surge in Annual Profits as Pressure Mounts for Higher Betting Taxes
UK Shares Advance Ahead of Budget as Financials and Consumer Staples Lead Gains
Domino’s UK CEO Andrew Rennie Steps Down Amid Strategic Reset
UK Economy Stalls as Reeves Faces First Budget Test
UK Economy’s Weak Start Adds Pressure on Prime Minister Starmer
UK Government Acknowledges Billionaire Exodus Amid Tax Rise Concerns
UK Budget 2025: Markets Brace as Chancellor Faces Fiscal Tightrope
UK Unveils Strategic Plan to Secure Critical Mineral Supply Chains
UK Taskforce Calls for Radical Reset of Nuclear Regulation to Cut Costs and Accelerate Build
UK Government Launches Consultation on Major Overhaul of Settlement Rules
×