London Daily

Focus on the big picture.
Monday, Jun 30, 2025

Global tax reforms that could raise billions edge closer as G7 on brink of agreement

Global tax reforms that could raise billions edge closer as G7 on brink of agreement

The shake-up plan has been driven by Joe Biden who wants to take on multinationals that shift profits to low-tax jurisdictions.

The biggest reforms to the global taxation system in a century are edging closer to reality, with the group of seven leading industrial economies now on the brink of agreeing to a global minimum corporate tax rate, insiders have told Sky News.

The unprecedented plans could mean the UK raises billions of pounds in taxes from tech giants and other big companies which have previously shifted profits around the world to avoid them.

G7 finance ministers are expected to agree to keep their business tax rates above a certain level - likely to be 15% - at next week's meeting in London, according to insiders close to the discussions.

US Treasury Secretary Janet Yellen will attend the meeting in London


The radical shake-up is being pushed by US President Joe Biden, who has vowed to confront long-standing corporate tax avoidance by multinational corporations, which routinely shift their profits to low-tax countries in an effort to reduce their payments to governments.

He has pushed for the minimum corporate tax rate, though some countries are resisting.

Ireland's finance minister, Paschal Donohoe, told Sky News that he stands firm by the country's 12.5% tax rate and has "significant concerns" about Mr Biden's plans.

The UK's corporation tax rate is currently 19%, but is set to rise to 25% by 2023.

The G7 - which comprises the US, Japan, Germany, the UK, France, Italy and Canada - is now likely to agree a shared position at the London summit next Friday and Saturday.

"We think an agreement between the G7 to get a common position on this is possible at next week's ministerial," a G7 insider told Sky News, though they added that it was unlikely to come in tomorrow's virtual summit of ministers and central bank governors.

Agreement depends in part on the US committing to other global tax reforms, including an overhaul of how the taxes are calculated and apportioned between countries.

This represents a significant shift, as last week insiders were briefing that an agreement looked unlikely.

The chancellor, Rishi Sunak, had originally intended for the meetings to focus primarily on climate change rather than tax reform.

However, insiders say discussions on the tax will now play a significant part in the London meeting.

A Treasury spokesman said the UK was pushing for a deal at the London meeting, which US Treasury Secretary Janet Yellen will attend in her first foreign visit since being appointed.

But the spokesman said it was dependent on the US committing to the other proposals on international tax put forward by the OECD - the international government organisation leading the work on reform.

"Reaching an international agreement on how large digital companies are taxed has been a priority for the chancellor since he took office," he said.

"Our consistent position has been that it matters where tax is paid and any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities.

Combined corporate tax rates


"That is what our taxpayers would expect and is the right thing for our public services.

"We welcome the US's renewed commitment to tackling the issue and agree that minimum taxes might help to ensure businesses pay tax - as long as they are part of that package approach."

The UK currently raises around £400m from a digital services tax on the tech giants - something that has long frustrated the US.

However, insiders believe that the combined global minimum tax and reforms on calculating taxes owed would potentially raise billions for the UK, with the minimum tax dwarfing those other parts.

Should a deal be sealed, the UK would ditch its digital services tax.

Alex Cobham of the Tax Justice Network, which argued in favour of international business tax reform, said: "The G7 ultimately dictates the OECD negotiations, so the suggestion that agreement is close on a global minimum corporate tax rate is significant.

"Such is the low rate of tax actually paid by major multinationals at present that even imposing an effective rate of just 15% would potentially raise some $275bn in additional, annual revenues worldwide - arguably the biggest change in international tax rules in a century.

"The UK alone stands to receive up to $15bn of that - crucial funds to support public services and the pandemic recovery, and more than twenty times what the government hoped to raise from its digital services tax.

"But it is crucial that undertaxed profits are allocated to countries according to where multinationals' real economic activity takes place - otherwise the headquarters countries, starting with the US, will take a completely disproportionate share of the revenues.

"The UK should also push for a minimum effective rate of 25%, as the Independent Commission for the Reform of International Corporate Taxation has recommended."

Newsletter

Related Articles

0:00
0:00
Close
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
×