Maarten de Wilde, professor of International and European Tax Law at Erasmus School of Law, reacts in NOS Journaal and hetFinancieele Dagblad about the G7 agreement and the reform of the global tax system.
Globally, companies pay little or no tax and this is partly due to the competitive rates that countries apply for company tax. In their agreement, however, the G7 now advocate a minimum profit tax rate of 15 per cent for corporate profits. De Wilde responds: "We know that it is a big problem in a broad sense and the devil is in the details, but having said that it is big news that the G7 want to put a floor in corporate tax and stop tax competition between countries."
The G20 and the OECD have yet to agree to the G7's proposal, but the British Minister of Finance already spoke of "a historic agreement after years of discussions". The new G7 deal ends transatlantic tensions that for years undermined negotiations between 140 countries over updating age-old tax rules. Still, experts are divided on the exact meaning of the G7 accord. One area of concern is, for example, the impact of the measures on developing countries and whether or not they specifically need the current tax competition.
The OECD itself is already working on a plan, but according to de Wilde, it still contains a flaw.