G7 finance ministers meet in London to strike tax deal

Rich nations have struggled for years to agree a way to raise more tax from large multinational companies

Finance ministers from the G7 group are meeting in London on Friday for two days of talks aimed at moving closer to a global deal to raise more tax from the likes of Google, Facebook and Amazon.

The gathering, chaired by British finance minister Rishi Sunak, is the first time the ministers have met face-to-face since the start of the coronavirus pandemic.

Rich nations have struggled for years to agree a way to raise more tax from large multinational companies, which often book profits in jurisdictions where they pay little or no tax.

U.S. President Joe Biden's willingness to raise taxes on large businesses now creates more chance of an international consensus than under his predecessor Donald Trump, and a need to repair COVID-hit public finances makes it more pressing.

I believe we can make significant progress in tackling some of the world's most pressing economic challenges, Sunak told reporters on Friday shortly before the meeting began.

Sunak stressed the importance of his fellow ministers from the US, Japan, Germany, France, Italy and Canada being able to meet face-to-face.

You need to be round a table, openly, candidly talking through things, Sunak told Reuters in an interview this week.

But the bigger challenge remains reaching an agreement on tax reform which could then be presented to the G20, at a summit in Venice in July.

In a joint letter on Friday, finance ministers from Germany, France and Italy wrote that they would commit to defining a common position on a new international tax system at the G7 Finance Ministers meeting in London.

We are confident it will create the momentum needed to reach a global agreement, they added. Spain signed the letter too.

However, Japanese finance minister Taro Aso said on Monday that he did not expect agreement this week on a specific minimum tax rate.

The U.S. Treasury expects a fuller agreement to come when Biden and other heads of government meet in southwest England on June 11-13.