And he said it was clear that taxation had to change in a “complex global digital economy.” Rich countries have struggled to agree on a way to raise taxes for large multinational corporations like Google, Facebook and Amazon. “We cannot continue to rely on a tax system that was largely designed in the 1920s,” Sunak said as he opened the meeting in London.
“And I’ll just say this – the world has noticed it. And I think they have high expectations for what we can all agree to over the next few days.”
Finance ministers including Janet Yellen of the United States and their contemporaries from Japan, France, Canada, Germany and Italy attended the summit at Lancaster House.
But the biggest challenge remains to reach an agreement on tax reform which could then be presented to a larger group of countries, the G20, at a summit in Venice in July.
In a joint letter on Friday, the finance ministers of Germany, France, Spain and Italy wrote that they “would commit to defining a common position on a new international tax system in London”.
The US Treasury expects a fuller deal when Joe Biden and other government leaders meet at the G7 in Cornwall on June 11.
The United States has proposed a minimum global corporate tax rate of at least 15% on the 100 largest and most profitable companies in the world.
Britain, Germany and France are open to this, but want to make sure that companies like Amazon – which have lower profit margins than other tech companies – don’t escape the net.
But just as important to Britain and many other countries, companies pay more tax where they make their sales – not just where they make a profit or set up their headquarters.