London Daily

Focus on the big picture.
Sunday, Oct 26, 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
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
China and Russia Deploy Seductive Espionage Networks to Infiltrate U.S. Tech Sector
Apple’s ‘iPhone Air’ Collapses After One Month — Another Major Misstep for the Tech Giant
Graham Potter Begins New Chapter as Sweden Head Coach on Short-Term Deal
Ecuadorian President Daniel Noboa Alleges Poison Plot via Chocolate and Jam
Lakestar to Halt External Fundraising as Investor in Revolut and Spotify
U.S. Innovation Ranking Under Scrutiny as China Leads Output Outputs but Ranks 10th
Three Men Arrested in London on Suspicion of Spying for Russia
Porsche Reverses EV Strategy as New CEO Bets on Petrol and Hybrids
Singapore’s Prime Minister Warns of ‘Messy’ Transition to Post-American Global Order
Andreessen Horowitz Sets Sights on Ten-Billion-Dollar Fund for Tech Surge
US Administration Under President Donald Trump Reportedly Lifts Ban on Ukraine’s Use of Storm Shadow Missiles Against Russia
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
×