Whats happening on tax at the G7 leaders summit?
Leaders of the worlds seven richest nations are set to reaffirm their finance ministers corporate tax deal as they gather in Cornwall this weekend for talks on Covid, climate and trade. Last weekend, finance ministers from the group of seven richest nations (G7) - including the US, UK, Germany and France - agreed in principal on a 15pc global minimum tax rate. Finance minister Paschal Donohoe, who was at last weekends event, said Ireland would be vigorously making the case for tax competition and Irelands 12.5pc rate. The G7 deal still needs to be approved by G20 nations before being put to the 139 countries currently discussing global corporate tax rules in the Organisation for Economic Cooperation and Development (OECD). It is also likely to be discussed at an EU-US summit next week. The US wants EU countries to remove their various digital taxes if an OECD deal goes through, but European Commission president Ursula von der Leyen doubled down on EU plans for a bloc-wide digital tax to feed into its own budget, due to be tabled this summer. "It is important to move forward, she told reporters ahead of the G7 summit. We support very much the proposal that is on the table and, as I said, we will make sure that our digital levy is non-discriminatory and moves forward too. We will see, in the very end, if there is a broader solution in a larger context like the OECD countries - its always our favourite.  European Council president Charles Michel, who chairs EU leaders quarterly summits, said that while corporate taxation is a national competence the bloc is moving towards harmonisation on tax matters. However, there is still opposition among many EU member states. While The Netherlands and Luxembourg have indicated they will support a deal if it is backed by the worlds biggest nations, some smaller EU countries - including Ireland, Hungary, Malta and Cyprus - are less keen. The EU has said it intends to legislate for any OECD deal by 2023, which will require the unanimous approval of all 27 finance ministers. Zach Meyers, a research fellow with the Centre for European Reform think-tank, said the EUs moves are unlikely to work and could even dissuade countries from agreeing to the OECD package. Simon Barry, Ulster Banks chief economist, said that it was still too early to gauge the possible impact on Ireland. The Department of Finance has estimated a 2bn loss to the public purse by 2025, but the figure is based on previous OECD talks, which didnt include a 15pc minimum tax. The US will be the big winner from a global minimum tax rate, according to the EUs tax observatory, with Belgium seeing the largest revenue windfall, followed by Austria and Ireland). Germany, France, Poland and Italy will also see a tax bonus. Fitch Ratings said this week that global tech companies might even welcome a global minimum tax if it replaces the patchwork of national tax rules that currently exist. G7 leaders are also set to discuss how to rein in China on the world stage, with Australia pressing for a reform of global trade rules. Meanwhile, the UK is pushing for its own trade deal with the US, which US president Joe Biden says would not be hampered by any veterinary accord with the EU to alleviate trade tensions in Northern Ireland.