Historic global deal to tackle multinational tech companies

The G7 finance ministers struck an agreement on global tax reform that will is intended to ensure the largest multinational tech giants will pay tax in the countries in which they operate.

During the meeting chaired by chancellor Rishi Sunak in London the ministers agreed the principles of a two pillar global solution to tackle the tax challenges arising from an increasingly globalised and digital global economy. Under pillar one the largest and most profitable multinationals will be required to pay tax in the countries where they operate not just where they have their headquarters.

The rules would apply to global firms with at least a 10% profit margin – and would see 20% of any profit above the 10% margin reallocated and then subjected to tax in the countries they operate.

Under pillar two the G7 also agreed to the principle of...