The G-7 has taken the first step in restructuring the global tax regime. This is the first international effort in decades. This has huge implications for global commerce (especially tech firms). Taxation of global groups & transactions is complex. Global trade issues are intricately related to international tax rules. Much beyond tariff taxation. Lot of work still needs to be done. Especially as to the minimum corporate rate, source taxation (location of economic activity) and settling issues of digital taxation. Drafting a code, national adoption and national implementation are huge next steps. For example, getting the eventual agreement through the U.S. Congress especially if it’s a formal treaty that require 2/3 vote of the Senate. But this is necessary to stop tax evasion, tax avoidance and a global race to the bottom. Ensuring tax compliance by multinational corporation is essential for an equitable economic system.

“G-7 and Global Corporate Taxation.” New York Times (June 5, 2021).