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PIMFA WEEKLY NEWS BULLETIN | 14 June 2021 Dear Nigel,
Welcome to the PIMFA Bulletin; grab a coffee and take 10 minutes to read this week's latest industry news impacting you and your firm.
G7 finance ministers agree historic tax deal
The G7 countries' finance ministers meeting reached a deal on 5 June 2021 which will make it more difficult for the world’s largest companies to avoid paying taxes. The G7 ministers agreed on a minimum 15% global corporate threshold that will force big companies to pay tax in the country in which they generate their business. Under a “two-pillar” strategy, large multinationals with a profit margin of 10% or more would be required to pay taxes on 20% of profits they earn above the 10% threshold in the countries where they generated the revenue. The second pillar commits countries to a global minimum corporate tax rate of 15% to avoid undercutting each other .
The agreement will contribute to the global efforts through the G20/OECD Inclusive Framework to address the tax challenges arising from globalisation of the economy and to adopt a global minimum tax. UK Chancellor Rishi Sunak said this was “a truly historic agreement” and praised the G7 for showing “collective leadership at this crucial time in our global economic recovery.”