* G7 agrees global minimum corporate tax of at least 15%
* UK's Sunak says tax rules 'fit for the digital age'
* Germany's Scholz says deal 'bad news for tax havens'
* Facebook expects to pay more tax, NGOs say plans too soft
(Adds Yellen comments, writes through)
By David Milliken and Kate Holton
LONDON, June 5 (Reuters) - The United States, Britain and
other large, rich nations reached a landmark deal on Saturday to
squeeze more money out of multinational companies such as Amazon
and Google and reduce their incentive to shift profits to
low-tax offshore havens.
Hundreds of billions of dollars could flow into the coffers
of governments left cash-strapped by the COVID-19 pandemic after
the Group of Seven (G7) advanced economies agreed to back a
minimum global corporate tax rate of at least 15%.
Facebook said it expected it would have to pay more
tax, in more countries, as a result of the deal, which comes
after eight years of talks that gained fresh impetus in recent
months after proposals from U.S. President Joe Biden's new
administration.
"G7 finance ministers have reached a historic agreement to
reform the global tax system to make it fit for the global
digital age," British finance minister Rishi Sunak said after
chairing a two-day meeting in London.
The meeting, hosted at an ornate 19th-century mansion near
Buckingham Palace in central London, was the first time finance
ministers have met face-to-face since the start of the pandemic.
U.S. Treasury Secretary Janet Yellen said the "significant,
unprecedented commitment" would end what she called a race to
the bottom on global taxation.
German finance minister Olaf Scholz said the deal was "bad
news for tax havens around the world".
Yellen also saw the G7 meeting as marking a return to
multilateralism under Biden and a contrast to the approach of
U.S. President Donald Trump, who alienated many U.S. allies.
"What I've seen during my time at this G7 is deep
collaboration and a desire to coordinate and address a much
broader range of global problems," she said.
Ministers also agreed to move towards making companies
declare their environmental impact in a more standard way so
investors can decided more easily whether to fund them, a key
goal for Britain.
TAXING TIMES
Current global tax rules date back to the 1920s and struggle
with multinational tech giants that sell services remotely and
attribute much of their profits to intellectual property held in
low-tax jurisdictions.
Nick Clegg, Facebook's vice-president for global affairs and
a former British deputy prime minister, said: "We want the
international tax reform process to succeed and recognise this
could mean Facebook paying more tax, and in different places."
But Italy, which will seek wider international backing for
the plans at a meeting of the G20 in Venice next month, said the
proposals were not just aimed at U.S. firms.
Yellen said European countries would scrap existing digital
services taxes which the United States says discriminate against
U.S. businesses as the new global rules go into effect.
"There is broad agreement that these two things go hand in
hand," she said.
Key details remain to be negotiated over the coming months.
Saturday's agreement says only "the largest and most profitable
multinational enterprises" would be affected.
European countries had been concerned that this could
exclude Amazon - which has lower profit margins than
most tech companies - but Yellen said she expected it would be
included.
How tax revenues will be split is not finalised either, and
any deal will also need to pass the U.S. Congress.
French Finance Minister Bruno Le Maire said he would push
for a higher minimum tax, calling 15% "a starting point".
Some campaign groups also condemned what they saw as a lack
of ambition. "They are setting the bar so low that companies can
just step over it," Oxfam's head of inequality policy, Max
Lawson, said.
But Irish finance minister Paschal Donohoe, whose country is
potentially affected because of its 12.5% tax rate, said any
global deal also needed to take account of smaller nations.
The G7 includes the United States, Japan, Germany, Britain,
France, Italy and Canada.
(Additional reporting by Andy Bruce, David Lawder, Padraic
Halpin, Thomas Escritt, Giulia Segreti, Sabahatjahan Contractor
and Mathieu Rosemain
Editing by Alexander Smith and David Holmes)