US President Joe Biden will use his G7 debut on Friday to push for considered one of his worldwide coverage priorities: a world settlement on a world minimal tax fee of at the least 15% on multinational corporations.

The finance ministers of the seven international locations have already put their help behind the plan throughout their assembly in London final weekend.

Crucially, the group additionally agreed that the largest corporations should pay tax the place they generate gross sales, and never simply the place they’ve a bodily presence.

UK finance minister Rishi Sunak introduced the settlement in a video posted on Twitter on Saturday, saying G7 finance ministers — hailing from Canada, France, Germany, Italy, Japan, the UK and the US — had “reached a historic agreement to reform the global tax system to make it fit for the global digital age and, crucially, to make sure that it’s fair so that the right companies pay the right tax in the right places.”

US Treasury Secretary Janet Yellen stated the settlement was a “significant, unprecedented commitment,” from the world’s richest economies aimed toward stopping corporations from avoiding taxes by shifting earnings abroad.

The announcement may have wide-reaching impacts. Tech giants corresponding to Apple, Facebook and Google is likely to be affected by the settlement. Foreign governments have long complained that giant digital corporations should pay them extra in taxes.

Some have not too long ago handed taxes particularly focusing on income generated by such corporations, together with these primarily based in the US corresponding to Facebook, Google and Amazon.

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