Will the G7 tax deal survive?

What are the chances of the G7’s agreement on a minimum rate of corporation tax actually coming into effect? While it was presented as a done deal last weekend, things are not going too well. Firstly, the G20 will have to agree — which is far from guaranteed given that smaller countries have less to gain from the proposal than the US. It is a tax designed to help countries with a large number of multinational companies who currently operate through subsidiaries in countries with lower corporation tax rates. While no G20 country currently has a rate below the agreed 15 per cent, (and the biggest loser, Ireland, with its 12.5 per cent corporation tax rate, is not in the G20), several countries might feel threatened — such as Saudi Arabia (20 per cent) and Indonesia (22 per cent).

It doesn’t help that one of the big tech companies whose revenues the tax was designed to capture, Amazon, appears to be exempt from some of the provisions.