President Joe Biden and leaders of the G7 group of nations will publicly endorse a global minimum corporate tax of at least 15% on Friday, one piece of a broader agreement to update international tax laws for a globalized, digital economy, according to CNBC.
The leaders will also announce a plan to replace Digital Services Taxes, which targeted the biggest American tech companies, with a new tax plan linked to the places where multinationals are actually doing business, rather than where they are headquartered.
For the Biden administration, the Global Minimum Tax plan represents a concrete step towards its goal of creating what it calls a “foreign policy for the middle class.”
For the rest of the world, the GMT is intended to end the tax cutting arms race that has led some countries to cut their corporate taxes much lower than others, in order to attract multinational companies.
The second major initiative Biden and G7 leaders will announce Friday is a plan they are “actively considering” to expand the International Monetary Fund’s supply of Special Drawing Rights, an internal IMF currency, that are available to low-income countries.
The White House also said G7 leaders will agree to continue providing policy support to the global economy for as long as necessary to create a strong, balanced and inclusive economic recovery.