Large multinational companies may soon be subject to a minimum global corporate income tax rate. Canada’s Finance Minister and the other G7 finance ministers agreed to support a minimum global corporate income tax rate of at least 15% on a country-by-country basis at a meeting on June 4 and 5 that considered taxation issues related to globalization and the digitalization of the economy. This global tax would apply under Pillar Two of the Organization for Economic Cooperation and Development’s (OECD) proposed two-pillar approach to address tax challenges arising from the digitalization of the economy. The G7 finance ministers also committed to several other measures in a communique issued on June 5, 2021, including how market countries would be awarded taxing rights under Pillar One, and coordinating the application of these new international tax rules with the removal of digital services taxes.
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