Sat, 07 Dec 2019

G7 finance: major progress

French Government
20 Jul 2019, 04:14 GMT+10

The agreement reached on international taxation is a major one. It is an agreement that is backed by France and that is part of the aim of the French presidency of the G7, i.e. rethinking capitalism so that it is fairer and more sustainable.

The agreement enables concrete progress to be made on taxing multinational companies, especially in the digital sector, and on minimum taxation: The countries agreed to adapt tax rules to tax multinational companies, especially in the digital sector, that create value with little or no physical presence. It was also agreed to put in place minimum taxation, in order to end harmful tax competition between states and the aggressive optimisation pursued by some businesses. The agreement, which is based on those two pillars, will enable the meaningful construction of a new, fairer, and more effective model of international taxation.

As regards taxing the digital sector, France did not wait for this G7 meeting to make it a priority. However, we have always preferred a co-ordinated, multilateral approach at both European and OECD level. Passing French legislation concerning taxation of the digital sector allowed awareness to be raised of the significance of the topic, and of the need for the G7 countries to agree to find a lasting solution.

Moreover, the G7 countries also discussed shared concerns relating to digital currencies: Regarding compliance with rules against money-laundering and on the fight against terrorist financing, protecting personal data, the risk to financial stability, and protecting savers. We cannot accept private businesses setting up their own currencies without any democratic control. That is why they agreed to provide a swift, collective response to the matter. A working group on the subject was set up led by Benoît Cœure, and it will make concrete proposals by the autumn.

Other important subjects were also discussed, again concerning reforming capitalism in the 21st century: the challenges posed by the digital sector in respect of competition and cybersecurity; the fight against climate change, with the mobilisation of finance; the fight against inequality in G7 countries and around the world.

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