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Biden tax proposal in focus at Group of 7 ministers' meeting

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Biden tax proposal in focus at Group of 7 ministers' meeting

by limited » Fri Jun 04, 2021 3:41 am

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U.S. President Joe Biden's proposals for deterring tax avoidance by multinational companies will be a major theme Friday when finance ministers from the Group of Seven wealthy democracies start talks on economic cooperation in London.

Biden's push for a global minimum corporate tax of at least 15% has unblocked stalled global tax negotiations and raised prospects of an agreement this year, although key aspects such as the actual rate remain to be decided. An endorsement from the G-7 could help build slotxo online support for a deal in ongoing talks among more than 140 countries being held in Paris.

A broader theme of the meeting Friday and Saturday will be restoring closer cooperation among the seven allies after four years of unilateralism under former U.S. President Donald Trump. His go-it-alone approach and imposition of trade sanctions on allied democracies disrupted the group — even as its members faced increasing challenges from rivals such as China and Russia. Officials will also talk about supporting the post-pandemic economic recovery through government spending, as well as vaccine access and distribution, and efforts to fight climate change.

Britain's Treasury chief Rishi Sunak is convening the meeting at the Lancaster House mansion in London because Britain currently has the rotating chair of the group. The meeting prepares the way for a June 11-13 summit of G-7 heads of state and government hosted by British Prime Minister Boris Johnson in Carbis Bay, Cornwall.

Biden's push to end what Treasury Secretary Janet Yellen has called a “race to the bottom” by low-tax countries has given new energy to Paris talks convened by the Organization for Economic Cooperation and Development. These had stalled, in part due to an insistence by the Trump administration that multinationals be allowed to opt out of new international tax arrangements.

The tax talks in Paris focus on two pillars: One is a global minimum to prevent multinational companies from using complex legal and accounting schemes to move profits to low-tax countries where they do little or no business. The second is finding a way to tax companies — particularly Internet-based ones — that may reap profits in countries where they have no physical presence and thus pay no tax.
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