International talks to rewrite the rules of cross-border taxation are in the home stretch with a deal possible in the coming weeks, the French and German finance ministers say.
Nearly 140 countries are negotiating how to update rules on taxing multinationals in the age of cross-border digital commerce and set a global minimum corporate tax rate.
German Finance Minister Olaf Scholz said talks were taking place almost every day at various levels as officials race to clinch a long-sought deal in July.
“I have a very good feeling that in just a few weeks we will agree on a revolution in international corporate taxation, namely a reallocation of taxing rights and a global mininum tax,” Scholz said in a joint online news conference with his French counterpart Bruno Le Maire.
Le Maire said countries were “not far from an agreement,” first at a meeting of G7 finance ministers next week and then more broadly in July at the G20.
France’s conditions for an agreement were close to being met, he said, namely a credible level of minimum taxation following a US proposal last week for a 15 per cent minimum rate, and that all big digital companies are covered by the new rules on where multinationals are taxed.
“There is clearly the possibility of reaching a historical agreement by the G7 next week and by the next G20 at the beginning of July,” Le Maire added.
While the aim is to have a deal in July, some officials have said that some details may have to be finalised in October as the US position hangs on what the Congress decides for a domestic tax reform there.