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G-7 Agreement in Principle on Taxes Could Prevent DSTs

The announcement over the weekend that the G-7 countries have agreed on a global minimum corporate tax could mean that digital services taxes will be avoided. The communique from the finance ministers said they agree that hammering out an agreement…

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on global minimums and how to treat revenues outside corporations' home countries that do not have a physical nexus should be done at the same time. Their goal is to reach an agreement in July. They said that home countries will have the right to tax the first 10% in profit, and then at least 20% of the profit past that amount of "the largest and most profitable multinational enterprises. We will provide for appropriate coordination between the application of the new international tax rules and the removal of all Digital Services Taxes, and other relevant similar measures, on all companies."